Every individual tends to postpone matters pertaining to retirements by saying they will be handled at the right time. There is no doubt that beginning these processes well in advance makes more difference. For millennials concerning financial issues, it is important to start building up good principles now in order to enjoy a hassle-free and fully economically sustainable future. This is a step by step outline to help you in the process of easily saving money from your income for your old age. Why Start Saving Early? One of the common wisdoms from Albert Einstein is “Compound interest is the eighth wonder of the world.” As the earlier in your savings journey you start in your 20s or even 30s, the time and compounding effect works in your favor. For example, assume you save ₹5000 every month in a scheme where the interest rate is 8 percent per annum, in 30 years you will have close to ₹75 lakhs. If however, you are saving in the same investment but start after a decade you will only accumulate ₹40 lakhs. Quite evidently the earlier you begin the bigger the size of your retirement nest. Read More :- Axis Bank Net Banking Set Clear Retirement Goal: First of all calculate how much money you will finally need for retirement. You will have fixed incomes like rent, food, transport, medicines, and so on. For instance, in case you will be spending around ₹40,000 monthly post retirement, you will need approximately ₹96 lakhs after 20 years ignoring the impact of inflation on expenditures. Budgeting Makes Sense: Start the process by wanting to save money, documenting what money comes in and out, and making up a budget that is practical. For instance, say you have no care how much entertainment may cost you, and that amount is ₹5,000; all that is required is to chop it down to ₹2,500, which translates to ₹30,000 in a year. Make SIPs and Mutual Funds your investment option: Systematic Investment Plans (SIPs) are a highly effective means of increasing one’s retirement income. By making a sustained investment in a mutual fund, one can reap the benefits of the market over a longer period. Let’s say every month you invest ₹3,000 in a mutual fund which gives you 12% return per annum. After 20 years, the total goes up to ₹40 lakhs. If one invests one’s hard-earned money in shares, bonds, and even mutual funds, it will help in ensuring growth and at the same time help in reducing risks. Utilize EPF and PPF: Employer Provident Fund (EPF) is a safe and convenient retirement saving option. Salary and employer contributions combine as a decent retirement corpus with time. For example, investment of ₹1.5 lakh in a PPF on an annual basis for 20 years at the interest rate of 7.5% will yield ₹40 lakh. Create a Diversified Portfolio: Never concentrate all your capital in one investment vehicle. Mix equities to enhance the returns and fixed income securities to provide the necessary cushion. A well-constructed portfolio reduces the risks and allows for growth over time. For instance, you can plan to invest 50% of your savings in the mutual fund, invest 30% in PPF and the remaining 20% in fixed deposits. In this way, you protect your future from the risks that are posed by the changes in the market. Conclusion Retirement and the planning thereof may seem like they are away, but the actions that one undertakes today will be what guarantees them financial freedom in the near future. Starting with goal setting, making investments, and learning to save money should be done in that particular order. Make use of government schemes and avoid risky investments such as PPF and EPF. Whenever you find yourself in such a position, you can opt for a ₹20 Lakh Personal Loan as opposed to touching your retirement savings fund. The earlier one starts, the more happiness one will enjoy during the golden age. Caesar Post navigation How To Identify And Open The Best CSGO Cases For Maximum Returns