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Retirement Planning: If you want to secure your future, it would be wise to start preparing for it along with your job. Invest in some such schemes from where you can add a huge amount till your retirement. But first you should calculate how much money you have to add for old age.
Keep this in mind while adding money
In fact, as inflation is increasing with time, your need for money is also increasing. In such a situation, it is very important for you to understand whether the amount which you consider sufficient today, will it be sufficient in your old age? Today, when we talk about Rs 1 crore, it seems like a huge amount to us, but after a few years from now, its value will not be much. Keeping this in mind, you will have to add this much money.
Rule of 70 will be helpful
Rule of 70 will help you in this. This shows how much time it will take for the value of your deposit to be halved. For this you should know about the current inflation rate. When you divide the current inflation rate by 70, the number that comes will tell you in how many years the value of your total savings will reduce to half.
understand with example
Understand with example- Suppose that at present the inflation rate is 6 percent. In this case, apply the formula and divide 70 by 6. 70/6 = 11.66 i.e. the value of your savings will be halved in about eleven and a half years. Meaning, if today you need one crore rupees to live a good life, then after about eleven and a half years from now you will need two crore rupees to live a good life because then the value of one crore rupees will be equal to Rs 50. Lakh.
Remember this when investing
This way, you can estimate the minimum amount of capital you will need to live a better life in old age. You will have to invest accordingly. Also invest in a place where you can get double the interest rate than the inflation rate. With this you will be able to build wealth faster.
Keep in mind the schemes with compound interest
Invest in places where you get the benefit of compound interest. Compounding has the ability to turn investments into wealth. The longer you invest, the more you can benefit from compounding. To create wealth you should invest as much as possible in schemes that offer compounding benefits like PPF, NPS, SIP etc. Apart from this, employed people can also increase their investment in EPF through VPF and add a good retirement corpus through it. ,