The ultimate financial plan for your retirement

How much money should you accumulate before you retire? Use our handy plan to create enough wealth before you retire.

Your retirement has the potential to be the best phase of your life. But you must start planning for it from today. Are you unsure about drawing a retirement plan? Don’t be – just follow our lead.

1 Tabulate your finances. Use this table below to map out your current finances. It helps you analyse your current spends and cut down on unnecessary expenses. Consider this hypothetical snapshot:

Month	Monthly income	House hold expenses	Saving	One-time expense	Total balance
April 2016	Rs 75,000	Rs 30,000	Rs 2,000	Rs 6,500 life insurance premium	Rs 40,500
May 2016	Rs 75,000	Rs 40,000	Rs 500	Rs 50,000 on holiday	Rs 26,000
June 2016	Rs 75,000	Rs 30,000	Rs 1,000	NIL	Rs 72,000
July 2016	Rs 75,000	Rs 45,000	Rs 1,000	NIL	Rs 1,03,000
August 2016	Rs 75,000	Rs 45,000	Rs 0	NIL	Rs 1,78,000

Ideally, you should hold the sums of money showed in the last column – but if you don’t, you have many hidden expenses or investments that you are not accounting for. Include them to get the most accurate picture of your finances. Also, you must try and reduce the sums in Column 3 (Household expenses) and increase those in Column 4 (Saving) as you progress towards retirement.

2 Assess your investments. After your retirement, when your income stops and expenses continue, only your present-day investments will help you tide over financial uncertainty. Your current investments could include life and health insurance, car insurance, PPF, fixed deposits, etc. Find out your tax liability for the year and look for more investments that can maximise capital and also give tax benefits.

3 Invest in retirement plans. The retirement or pension plan you buy today will reap rich rewards for the future. Look for retirement plans that pay annuity throughout your life and also provide a lump sum payment (i.e. returns all premiums paid) to your partner on your unfortunate demise. Use a pension plan calculator to find all the monies payable in the savings cum protection plan you choose. The retirement planning calculator also helps compute maturity income, tax benefits, death benefit, etc.

4 Recalculate surplus funds in the future. Some lifestyle changes in the future will help you recalibrate your finances for retirement. For example, the 3 BHK house you live in could be sold in the future when you and your partner move into a smaller house post-retirement. You could also sell some of your assets (car, unused furniture) or let out a spare room to make a monthly income.