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Don't fool yourself about retirement


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This is one goal that must be taken seriously and thought of the moment one starts earning....

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Don't fool yourself about retirement

  1. 1. Dont fool yourself about retirementThis is one goal that must be taken seriously and thought of the moment one starts earning....Author : iFast Content TeamThis week, Money News threw up 5 interesting statistics where the American public isconcerned. 46% of Americans have less than $10,000 saved for retirement 40% of baby boomers now plan to work until they die 36% of Americans say they don’t contribute anything at all to their savings 87% of adults say they are not confident about having money for a comfortableretirement Expected retirement age is up to 67 from age 63In India, we have data from HSBC’s The Future of Retirement programme to go by. The latter isan independent study into global retirement trends. This year it came out with its report “A newreality”, the eighth in The Future of Retirement series based on a survey of more than 15,000people in 15 countries. Here are some insights from the India report as well as suggestions. Fear as a motivationAlmost half (49%) say that the prime reason for retirement saving is the fear of not havingenough to live on later on in life. When asked which is the biggest fear concerning retirement,54% say it is financial hardship and 43% worry about not having sufficient funds for health careneeds and expenses. So it’s not surprising to note that 44% plan to continue to work to someextent even after retirement. Expect changesBe aware of how major life events affect saving for retirement. As most people will be affectedby these events at some point in their lives, it is important to prepare in advance to minimisethe detrimental impact on their retirement savings. Respondents listed buying a home, payingfor a child’s education, the economic downturn, and having to pay for a dependent as the mostsignificant life events that impacted their ability to save for retirement. Get real about your retirement needsGlobally, respondents believe their savings will run out on average halfway through theirretirement. That is a very frightful situation to be in. With life expectancy increasing, peopleneed to be aware how long their money will have to last, so that they can take steps to avoid anyshortfall. In India, most respondents on average expect their retirement to last for 15 years, buttheir retirement savings to last for only 10. Put your savings priorities in orderGlobally, 22% are not currently saving anything for retirement. A proper balance must beestablished between spending on short-term needs and saving for long-term goals such asretirement. Shifting priorities now towards longer-term saving can lead to a more prosperousfuture. Do not be under the misconception that you will be able to get by on a much lowerincome: 98% said they need all of current income to stay comfortable in retirement.
  2. 2.  Plan for the futureThere is a direct link between having a financial plan and saving more. Globally, 44% say theysaved more for retirement with a financial plan in place. In India, this relationship is evenstronger with over half the respondents (54%) saying financial planning led to increased savingfor retirement. Having a financial plan and just saving something, however small to start with,can make a big difference to retirement income in the long run. The respondents in India citedlife insurance, cash savings and deposits, personal pension schemes, mutual funds, and stocks asthe key components of retirement income. Use professional adviceLooking at respondents with average incomes, those who use professional advice whenplanning their future have the greatest levels of retirement and other savings. Developing afinancial plan with a professional adviser can help ensure that all retirement needs areidentified, gaps avoided, and eventualities covered.Use equity to plan for retirement. It provides growth and beats inflation. With over 3,500 schemesfrom 41 asset management companies and 47 banks on our platform, we give you the convenienceof buying and selling mutual funds online. Click here to see the numerous benefits we offerinvestors at why you should consider investing in mutual funds.To buy and sell mutual funds online, click here.Disclaimer: iFAST and/or its content and research team’s licensed representatives may own or have positions in the mutual fundsof any of the Asset Management Company mentioned or referred to in the article, and may from time to time add or dispose of, or bematerially interested in any such. This article is not to be construed as an offer or solicitation for the subscription, purchase or saleof any mutual fund. No investment decision should be taken without first viewing a mutual funds scheme information documentincluding statement of additional information. Any advice herein is made on a general basis and does not take into account thespecific investment objectives of the specific person or group of persons. Investors should seek for professional investment, tax, andlegal advice before making an investment or any other decision. Past performance and any forecast is not necessarily indicative ofthe future or likely performance of the mutual fund. The value of mutual funds and the income from them may fall as well as rise.Opinions expressed herein are subject to change without notice. Please read our disclaimer on the website. Please read ourdisclaimer in the website. Risk Factors: Mutual funds, like securities investments, are subject to market risks and there is noguarantee against loss in the Scheme or that the Scheme’s objectives will be achieved. As with any investment in securities, the NAVof the Units issued under the Scheme can go up or down depending on various factors and forces affecting capital markets. Pastperformance of the Sponsor/the AMC/the Mutual Fund does not indicate the future performance of the Scheme. The name of theScheme does not in any manner indicate the quality of the Scheme, its future prospects or returns. Please read the Statement ofAdditional Information and Scheme Information Document carefully before investing.