Essay On Income Expectancy After Retirement

744 Words3 Pages
Income expectancy after retirement is a major concern for people belonging from organized as well as unorganized sectors. After retirement it is also essential to maintain a good lifestyle and so good income post retirement is a major area of concern. Old age is inevitable and so are some of the expenses. People nurture a dream to have a cozy home or a luxury car throughout their lifetime and they ought to fulfill it by the time they retire. There are also expenses like children’s education and marriage. With increased life expectancy the need to save for 25-30 years after retirement has become necessary now. With the recent advents in health, children today have started to live more than their parents and there has been a rise in the average age of a person. It is not so easy to plan an income for 25-30 years after…show more content…
It creates havoc with those investments that yield fixed return. For example, when the inflation rate is at 7.5%, on an investment at 8% the real rate of return is 0.5%. So Inflation plays a major role while planning for the retirement of an individual. It calls for such an investment from where a large corpus fund can be generated and also those whose yield are significantly high above the investment rate. Investing at compounding rates of return yields higher returns. It meets the motive of building a large corpus over a certain period of time that yield high investment returns. Retirement planning involves two steps. The first step involves determining the total money that one would need every month after retiring, which can be found out by a retirement analysis. The second step is selection of a retirement plan. These can be found out by knowing the motive of investment, duration of investment, risk bearing capacity. Retirement planning at an early stage at compounding returns is very essential so that one is able to lead a happy life without begging for anybody’s help after

More about Essay On Income Expectancy After Retirement

Open Document