What Is Retirement Services?
Acknowledging the simple facts that neither the money one earns will last forever, nor will one remain in a position to continue earning throughout his life, paves out some mesmerizing ways in which one can precisely plan out his retirement funds. Doing this not only ensures that an individual continues to enjoy his lifestyle with ease but also safeguards the individual in times of urgency post retirement.
How To Plan Retirement Funds Effectively?
Out of all the numerous ways to plan one’s retirement funds, these 4 steps ensure that an investor accomplishes all his post retirement desires and needs effectively:-
Saving 10% Of The Current Income:
This is an easy one to start with when it comes to planning one’s retirement funds, specifically for the ones with a regular job. This is because, an employee having a regular job must mandatorily put out 12% of his salary into the EPF (Employee Provident Funds Account) and Family Pension Funds Account along with an equal contribution from the employer in accordance to the EPF rules. However, for the one’s who do not have a regular job and are not covered by the EPF umbrella, must ensure that they pay off at least 10% of their total earnings in terms of investments to plan and provide for their post retirement lifestyle. This ensure the benefits of long accumulated compound wealth to be enjoyed post one’s retirement.
Increasing The Investment Amount Along With Increase In Income:
One’s way of living and maintaining a lifestyle does not change drastically with increased income, however, the capability to change invest more definitely does. This is simple calculation, the more one invests, the more one has the opportunities on getting more returns and the more returns one gains, the better and easier it becomes for one to maintain his lavish lifestyle even post retirement.
Pledging Not To Dip Into The Corpus Before Retirement:
It’s easy to develop new desires and the want to fulfill them, especially when one has the resources to do so. Nevertheless, the smart way out is to keep control and restrain oneself from using the funds being accumulated for one’s retirement. Doing this may seem tough at times but proves to be totally worthy. Furthermore, any withdrawals from the EPF within 5 years of joining in are considered taxable and are hence not a wise choice.
Minimum Withdrawal In The Initial Years:
Considering the factors of inflation and increasing life expectancy, one must restrain from withdrawing any more than a typical of 5% per year from the accumulated retirement funds, specifically during the first 5-10 years post retirement. Increasing the withdrawal to 10% per year post 70 years of age is considerably good enough, though. Following this procedure ensures that one does not run out of funds any sooner post retirement and stays sufficiently able to maintain the pre-retirement lifestyle.