How much should you save for retirement?
You can never be sure of how much you should save for retirement. It
is different for everybody. Just start saving each month specifically for
retirement. Time to time, make sure you increase the quantum of savings.
Keep in mind your retirement goals, responsibilities and
post-retirement income like rental income, pension etc. while ascertaining how
much you want to save for
retirement.
2. Should you start saving for retirement while in
college?
This can’t be bad at all. Starting early instills financial
discipline in you.
3. Should you save for retirement or children’s
college education first?
Saving for retirement is as important as saving for children’s
education. You surely want to give your children the best education you can
afford. You definitely don’t want to be a burden on your children. Therefore,
both should be given equal importance.
4. How to save for retirement and children's education
at the same time?
It's not at all easy to save for retirement and children's
education at the same time. Education expenses are ever increasing. Is
your income also increasing accordingly? You may think so, but don’t forget
that inflation eats up most of the hike in your salary.
Postponing retirement means losing out on years of
compounding power and tax-deferred growth. Postponing saving for children’s
education may mean the need to avail educational loan and years of repayments
along with other loan repayments.
5. Should you invest in a pension plan if you
are contributing to EPF?
Yes. IT is very important to invest in a separate pension
plan. EPF should be kept intact till your working life unless you quit and
start a business. In this case, you’ll have to be wary of the tax implications
of EPF. Also, with inflation increasing at alarming rates, it is wise to save
as much as you can. Invest in Mutual
Funds, Equity Funds, PPF, etc. Remember, your
retirement portfolio should be diversified.
It should have fixed income earning securities, debt and
equity components. Consider PPF and FD to earn for fixed income.
Consider debt funds to earn better returns than FDs at moderate risk.
Consider ELSS to create
wealth over a long-term.
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