Retirement Planning and the Middle-Income Group

If you ask, which income group should prioritise their retirement planning more than others, we will tell you without a hint of confusion that it has to be the middle-income group. Their tendency to spend more with the slightest increase in income is the main reason why they fail to manage their finances properly.Over time, this quirky habit of failing to manage finances better hinders the chances of saving for their retirement.

Things to consider before retirement planning

The following pointers highlight the important decisions that the middle-income group should think about before planning their retirement:

  • The targeted age in case of an early voluntary retirement
  • The targeted amount that they want to save up for their retirement corpus before retiring
  • An estimation of the cost of lifestyle that they wish to follow after retirement
  • Whether to put money into retirement friendly investment tools and other retirement-oriented saving schemes
  • The effective selection and diversified investments in financial tools that are pro retirement
  • The weight of the pros and cons of availing a financial expert’s opinion about the retirement plan

Retirement Planning tips for the middle-income group

In order to secure life and finances better after their retirement, people from the middle-income group should follow these basic yet exceptional tips:

  • Start your retirement planning early to build a reliable retirement fund with little investment. Unlike the ones who wait until last moment to plan their retirement, you will find the task of building your targeted retirement corpus easier and faster.
  • Focus on investment options that encourage growth in your earnings in a steady but systematic manner and help you to generate wealth in the long-term through its positive compounding effect.Don’t get carried away by investment tools that promise higher returns as they also tend to have greater risks too.
  • Consider all the pros and cons of spending money on something before buying it. It may be an asset or an investment tool, always be wise about your choice. Be careful about your spendthrift nature, so that you don’t regret draining money that could have been utilised better for retirement planning.
  • While putting your hard-earned money in the investment market make sure to diversify your investment portfolio. Choose investment tools that are suitable for you and agreeable to your risk tolerance capacity.
  • Entrust the task of managing your finances and investments to someone, who is reliable and is professionally equippedto handle them if you think you lack the proper knowledge of the investment market.
  • Lastly, don’t forget to review and update your retirement plan at various stages of your life and according to the prevailing market conditions to make the most of any given situation.

The basic requirements of planning your retirement properly are a generous amount of market knowledge and familiarity with the concepts of retirement planning. Do you fall under the middle-income group? Find out from our qualified financial experts and professional financial advisors how you can prioritise and plan your retirement even with your limited savings.

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Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Past performance is not an indicator of future returns. Wealth Redefine is a AMFI registered Mutual Fund distributor – ARN - 167127

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