Retirement Planning concept is one of the biggest assets and it has been evolving as the best way since last 50 years. It is too good to be true that you will be living a longer and perhaps retirement would be few years earlier.

And even most of the people are facilitated with

retirement planning with a pension this is one of the proud moment that we are earning even after retirement. You can happily earn your retirement money or pension for the next 30 years.

what is retirement planning?

Before you could start it is essential to know what is retirement planning? There are many people who make a proper planning especially when they notice that they are reaching final stage of their working career. This is possible with an external support called retirement planning. Therefore it is essential to concentrate on the retirement plan for your future.

When you think of retirement planning then you would probably have lots of questions in your mind. What type of pension option you need to select? What is the retirement plan for retirement planning for self-employed people? And so on.

Most of the people do not know What is the rule of 80 for retirement?  the actual meaning of it is that the employee who is 80 years of age have an experience of 80 then the employee has got right time to think of retirement planning.

What is the 4% rule?

Considering the 4% rule which states that it is essential for an individual to withdraw minimum 4% of their portfolio every year in retirement for a entire life time. This 4% rule was however created with the help of historical data on stop along with Bond returns over 50 years of time.

As per Reserve Bank Of India statistical data the percentage of people who plan for their retirement is as under

Retirement Planning RBI statistics of India
Reserve Bank Of India Data for Retirement Planning percentage in India
Image credit/source- RBI official website

Step by step procedure for retirement planning

Basically you should know what are the steps involved in retirement planning. Knowing this will help you to have a rough estimation of things involved in it. So let us get started by knowing about them in detail.

  • Set your retirement goals
  • Estimate your current financial position
  • Identifying the source of retirement income
  • Evaluating retirement risks
  • Understanding health care issues
  • Invest your retirement assets
  • Managing your retirement income
  • Monitoring your retirement assets

So these are the basic steps and below you would find each of them in detail and know why retirement planning is important for the individuals.

Set your Retirement Goal

The first and foremost thing that you need to do is think on how you could set the retirement goals. Setting your retirement goals ahead will help you to know when should you start retirement planning. If you could do this then it is a good start for your retirement planning. Get starting by analysing yourself in a broad way so that all things will fall in place. You can even create a checklist for retirement planning that will give you basic idea of what is what.

You just create checklist in such a way such that you come up with different retirement goals. Create 30 goals so that it will be easy to identify first 10 and the next 10  a bit harder and the final 10 will help you to discover your dreams. Organising and arrangement of goals need to be set according to the priority such as a short, medium and long term goals.

Estimate your current financial position

An easy way to find the successful path for your retirement goal in to know about your present financial position. By knowing your present financial position you will have a clear picture so that it becomes easy to build up a proper retirement planning. For this you need to have a net worth statement that can be an easy way to identify various assets that will help in driving retirement income.

In addition to that there should also be an analysis so as to assist the retirement budget and its requirements. How much you need to spend on your daily basis? You may probably required 90% of your pre retirement income so that that will help in meeting the retirement demands. For this you can simply come up with an analysis and then create cash flow statement for a budget analysis.

Identifying the source of retirement income

Considering the retirement income is an obtained from various sources where the percentage of the retirement income changes from time to time. Some of such sources are social securities, pensions, part-time work and any other sort of savings.  you need to consider even the after tax benefits associated with the retirement plan that you choose.

Evaluating retirement risks

Apart from all these things you should keep in mind the risk factors that are associated especially when you are concentrated on retirement planning. The risk factors are one of the essential things that will have huge impact on your retirement income. As time goes on the inflation along with erode will affect the power of your income. This will in turn flatter the investment markets as well. No matter what type of retirement plan you choose make sure that you concentrate on the risk factors associated with them.

Understanding health care issues

The retirement plan will also bring you an advantage of utilising Healthcare insurance. If you expect that you would retire at the age of 65 then it is essential to get a good health insurance plan along with it. There are some retirement plans that will also add health insurance of above a particular period of age and state how important is retirement planning is. By doing so there are maximum benefits that you can cover regarding the medical bills and make you feel secure. You can also choose a long term Care Insurance plans that will offer you with wide variety of choices. In addition to that you need to be very careful while selecting such type of retirement plans.

Invest your retirement asset

Along with identification of goals and withdrawal of portfolios they require definition, development as well as a return investment policy. This will however help in governing the investment that you receive. The investment policy statement will act as a route map for your retirement plan. The policy statement various issues need to be addressed clearly.

In addition to the the policy must also provide diversity especially from the investment that PVC significant with goals and time limit along with capability to face any sort of resources in future. Only in such circumstances, you could identify exchange-traded funds, mutual funds and bonds.

A proper selection will however help in reflecting the decision you take on your investments. Under this different retirement sources and knowing the characteristics of the assets are essential.

If you are a citizen belonging to India then it is essential to go through the retirement planning India calculator that helps in calculating corpus that your require to ensure well planned lifestyle post retirement.

There are some sort of incomes including the wages and interest that can be calculated at ordinary tax rates along with dividend income and long term capital gain that may be considered to have typed at low rates. In such circumstances it is essential to take into consideration regarding the tax consequences of both the sales as well as asset purchase.

Managing your retirement income

In this busy and working environment we get income from various sources and businesses. With the implementation of retirement planning will have impact on the paycheck ceases. The income that you select will probably be generated from various sources. If you could plan and monitor everything in a proper way then it becomes very easy to manage the retirement income. Perhaps you will understand the size of your social security payment which depends upon the time when you received profit. For example the retirement planning for teachers, employs and drivers may vary depending on the work portfolio.

Depending upon the wait period the amount or the monthly payments will be increased. Therefore it is essential to know the optimal time so that it becomes easy to compensate the social security payments which depends upon various circumstances that fall in place.

Monitoring your retirement assets

It is event essential to have but check on the retirement assets. This can be processed through a constant review of the financial situations. You can take help from the net worth statement and the retirement budget along with the portfolio that will help in calculating the statement.

In addition to that monitoring your portfolio along with withdrawal rates can also give you an estimated Idea weather you have sufficient assets to get funded with your retirement income. In some cases you may also find that there is requirement to take part time work even during retirement.

It is even essential to have a balanced and sustainable withdrawal rate in order to balance your retirement planning. Moreover it is also an excellent idea to have the cheque on in appropriate assert allocation thereby checking the reviews of the portfolios. This is helpful through quarterly reviews that will help you to enjoy the retirement plan that you have selected.


Retirement planning and its income are really difficult tasks which can not be left when to take a risk. So by now you might have got what is retirement planning definition and its meaning.

Therefore it is essential to follow the guidelines and the steps provided to have a successful retirement planning.

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