Investment and Retirement Planning
CHAPTER-1 INTRODUCTION TO RETIREMENT PLANNING
IMPORTANCE OF RETIREMENT PLANNING
Introduction
• Retirement is the point where a person is not in any kind of employment /business/occupation. • This usually happens upon reaching a determined age, when physical conditions do not allow the person to work any more. • Retirement could also be due to personal choice-either due to adequate pension or personal savings or due to a regular unearned income like interest, rents etc.
• The retirement age varies from country to country but it is generally between 55 and 70. • Certain jobs, which are of dangerous nature or of fatiguing nature, may have an earlier retirement age.
Support and Funds
• Retired persons support themselves either through superannuation, pensions, savings or through family (earning children), as in Indian families. • In some other countries the government provides the pension benefit to all its citizens.
Retirement Planning
• Retirement financial planning refers to a collection of systems, methods and processes which support a family unit’s (client’s) desire to achieve a state of financial independence. • It is a process of determining the financial goals at the point of retirement. • It requires constant monitoring of the progress of the plan and then taking adequate remedial measures
Need For Retirement Planning
• Increasing Life Span • Low Returns In Conventional Modes Of Savings. • Unintended Contingencies. • Increasing Medical Cost. • Diminishing Trend Of Joint Family System • Inflationary Trends • Absence Of Social Security Benefits By The State • Pursuing Hobbies • Falling Interest Rates
Steps In Retirement Planning
• Decision retirement about the retirement age option. • Setting of financial goals • Saving of relevant amounts w.r.t. goals • Investing in appropriate modes • Calculation of net worth • Regular monitoring of financial plan and incorporate the necessary amendments in the plan.
Factors Affecting
IMPORTANCE OF RETIREMENT PLANNING
Introduction
• Retirement is the point where a person is not in any kind of employment /business/occupation. • This usually happens upon reaching a determined age, when physical conditions do not allow the person to work any more. • Retirement could also be due to personal choice-either due to adequate pension or personal savings or due to a regular unearned income like interest, rents etc.
• The retirement age varies from country to country but it is generally between 55 and 70. • Certain jobs, which are of dangerous nature or of fatiguing nature, may have an earlier retirement age.
Support and Funds
• Retired persons support themselves either through superannuation, pensions, savings or through family (earning children), as in Indian families. • In some other countries the government provides the pension benefit to all its citizens.
Retirement Planning
• Retirement financial planning refers to a collection of systems, methods and processes which support a family unit’s (client’s) desire to achieve a state of financial independence. • It is a process of determining the financial goals at the point of retirement. • It requires constant monitoring of the progress of the plan and then taking adequate remedial measures
Need For Retirement Planning
• Increasing Life Span • Low Returns In Conventional Modes Of Savings. • Unintended Contingencies. • Increasing Medical Cost. • Diminishing Trend Of Joint Family System • Inflationary Trends • Absence Of Social Security Benefits By The State • Pursuing Hobbies • Falling Interest Rates
Steps In Retirement Planning
• Decision retirement about the retirement age option. • Setting of financial goals • Saving of relevant amounts w.r.t. goals • Investing in appropriate modes • Calculation of net worth • Regular monitoring of financial plan and incorporate the necessary amendments in the plan.
Factors Affecting