Retirement Evaluation & Planning

2nd July 2021 0 By indiafreenotes

Financial planning is a process of setting objectives vis-à-vis your current income. It involves assessing your currents savings and assets, estimating future financial needs, and making plans to achieve monetary goals. Retirement Planning goes beyond financial planning or providing investment advice and is aimed at achieving financial security for retirement. It is aholistic solution aimed at enabling people to achieve their financial dreams both before and after retirement.

Retirement planning is not an art but a definitive science which requires taking a 360-degree approach to studying one’s current financial health, long-term goals and risk appetite to design a plan that addresses the retirement and other long-term goals of an individual.

It involves a step-by-step approach:

Step 1: Identifying your financial and retirement goals

Step 2: Analysing your current financial situation

Step 3: Risk Profiling

Step 4: Asset Allocation

Step 5: Investment Allocation Strategy

Step 6: Periodic Monitoring and Rebalancing


  • Cut down expenses.
  • Seek expert advice / professional help to create a roadmap for you to maximise your savings without compromising your standard of living.
  • Choose investment options that give you higher returns.
  • It is good to have a working spouse to generate an additional income stream.
  • Look for additional income through another job / business simultaneously if possible.
  • Start immediately.


Decide Your Retirement Age

The most common retirement age is 60 years, but it may vary from person to person.

Some may wish to work beyond 60 years of age, while a few even wish to retire at 50 basically it’s a matter of choice.

Estimating your retirement age is an important step, because after this age your regular income stream will stop or at least reduce considerably (in case you are eligible for pension). You will have to depend on your savings and investments to take care of your retirement needs.

Start Early to Retire Peacefully

Like any other goal, start planning your retirement as soon as possible. With several years in hand, you have time and the power of compounding in your favour.

Never delay retirement planning or else you might have to compromise your goal. Worst case you might have to be financially dependent on your children or family. Hence, start early, start now.

Most individuals who are in their 20s and having recently started earning might think that retirement is a distant reality. For them, planning for retirement at this early age may seem like being overly cautious.

Determine Your Retirement Corpus

Retirement corpus is the amount you require post retirement to meet your expenses and continue with the same lifestyle and maybe pursue your other personal goals.

For this, first ascertain your annual expenses at present.

For that you need to first write down monthly expenses on various categories such as household, medical, entertainment, travel, EMI, and children’s school/tuition fees, and so on.

So, it is important that you make an accurate estimate of how much amount you will require, to maintain your present lifestyle after you retire.