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Did you know general and medical inflation in India are around 5% and 14%, respectively? This means that expenses like food, housing, transportation and healthcare will continue to rise. So, covering these costs in old age, without any regular income, can become challenging without a proper financial plan.
Retirement is a significant milestone, and every person wants to lead a life of dignity and financial independence even after they retire. That is why planning for your retirement is very important. A retirement planning advisor, i.e., a SEBI-registered investment advisor (SEBI RIA), can guide you in making the right decisions.
But how to find the right retirement advisor in India? Let’s find out.
What Do You Understand By Retirement Financial Planning?
Financial planning for retirement is all about instilling savings and investing habits to give yourself what you deserve and ensure a better and secure future. Retirement planning services are all about having a steady source of income after retirement.
Retirement planning service includes creating a strategy and investing for your future. This strategy depends on your financial goals, income, and age.
In retirement financial planning, you decide what amount you will require after retirement and then create a plan to build a corpus. This corpus can take care of your lifestyle in your retirement years.
Effective financial planning in retirement strategies can help secure a stable future.
Why Plan for Retirement?
Retirement and financial planning can provide you with the means to lead a happy and comfortable life after retirement. Financial planning for retirement in India is useful for the following factors:
1. For a Longer Life
The average life expectancy in India is improving. It has improved by 4.11 years in the last 21 years. Surely, it’s a good thing. But this means your savings must last longer. Without proper planning, you may outlive your savings and face financial difficulties in old age.
2. Leave a Legacy
Proper retirement plan services allow you to secure your own future, potentially support your children’s education and marriage, or help them start businesses. It is about creating generational financial stability.
3. Fight Inflation
As you know, the Indian economy faces consistent inflation. Not having proper retirement plan solutions can erode your life savings. Strategic investments in retirement can help your money grow and keep pace with rising costs.
4. Financial Independence
Everyone wants their later years to be relaxed and comfortable. Solid retirement financial planning assures that you don’t have to rely on others for financial support, and you can enjoy your golden years.
Steps to Create a Retirement Financial Plan
Retirement financial planning can be done in four straightforward steps.
1. Set Retirement Goals
Start with establishing clear and reasonable retirement goals.
- Do you want to travel?
- Move to a new house?
- Build a medical fund?
- Live in a metro or a smaller town?
All these goals will help you decide the amount you want to save and invest. A SEBI-registered financial retirement planner/advisor can help you set realistic goals.
2. Calculate Retirement Corpus
Retirement corpus is the amount you will require to live a comfortable and secure life post-retirement.
Income and expenses are common elements required for calculating retirement corpus. Note down your current income and expenses. Now, estimate your future expenses, including healthcare, daily living costs, and emergency funds. Consider inflation and create a realistic savings target.
A financial planning retirement planner/advisor, i.e., a SEBI RIA, can assist you in calculating the right retirement corpus.
3. Choose the Right Investment Options
You can choose from multiple avenues:
- Public Provident Fund (PPF)
- National Pension System (NPS)
- Mutual Funds
- Equities
- Fixed Deposits
- Senior Citizen Savings Scheme
Select the right mix of retirement investment avenues to build a sufficient corpus. Retirement planners/advisors, i.e., SEBI RIAs, can also help you opt for the right options for your needs.
4. Build Multiple Income Streams
Don’t just rely on savings. You can consider income sources like:
- Dividend-yielding stocks
- Rental income
- Pension plans
- Systematic withdrawal plans or SWP
How to Choose the Best Advisor in India?
Retirement plan advisors/SEBI RIAs can make your retirement journey smoother. Note these points before choosing a retirement plan advisor.
- Check whether retirement planning advisors have SEBI registration. A Certified Financial Planner (CFP) can also help you create comprehensive financial plans for retirement.
- SEBI RIAs charge fees in different ways. Some take a percentage of assets advised, while others charge flat fees. Choose an advisor whose fee model is transparent and suits your budget.
- Select a retirement planning financial advisor with a proven track record, understanding of Indian financial markets, experience in retirement planning and knowledge of tax laws and investment strategies.
Caution: Under SEBI regulations, only registered Investment Advisers (RIAs) can offer personalised investment advice on securities in India. Avoid unregistered advisors or fin-fluencers who are not authorised to provide retirement investment advice.
Conclusion
Retirement is one of the most significant life transitions, yet many people do not give it the attention it deserves. Moving from a steady income to relying on savings requires careful retirement financial planning.
Everyone dreams of a comfortable retirement, but financial security may be at risk without a solid plan. With people living longer, retirement is becoming more expensive, making early financial planning in retirement essential. A solid retirement financial plan ensures you remain financially independent and prepared for any challenges that arise.
So, don’t wait; plan for your retirement today with Scripbox!
FAQs
You can select retirement financial planners by looking at their SEBI registration, qualifications, experience handling retirement planning, and fee structure.
Yes, a financial retirement planner can estimate your retirement needs, suggest investment options, and build a financial plan to secure your future.
Trust, transparency, SEBI registration, and experience are all important factors when selecting a financial advisor for retirement. An advisor should have a clear and honest approach to managing your finances.
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