Early retirement is a rising trend in India, as retirement itself has positive connotations for 73% of the population. People in their thirties and forties aspire to leave the corporate workforce behind and embrace a different, high-quality lifestyle, but is this possible? In fact, it is. With good financial planning and the right decisions made from a relatively early age, you can enjoy a long life as a retiree and have all important aspects of your life covered.
Smart investments and savings will make a difference
The secret to financial stability once you retire is to plan ahead and start way before you actually stop working. Even though retiring at 30 or 40 is a growing aspiration for Indians, only 1 in 3 people save for retirement, and 6 in 10 regret they started too late. The best moment to start with your financial planning for retirement is your early 20s: take a percentage of 10-30% of your salary and invest it. Start an SIP, a PPF or another similar investment plan, which often pay off better than a fixed rate savings account. Complement these funds with a term insurance to cover for future expenses. Meanwhile, seriously consider any big expense or withdrawal from your funds accounts; would that money serve a better purpose as an investment fund instead?
The retirement scenario has changed
The retirement scenario in India has changed a lot in the past few decades. Life expectancy is still on the rise, moving up from 62 to 69 in only fifteen years. This, combined with young Indians starting later in the workforce – because they go to college – mean they spend a smaller percentage of their lives working. On top of this, family structures are changing, and the newer generations are feeling less pressure to support their parents financially as they grow older. This means retirees must sustain themselves instead, but the general opinion is that this is not a bad thing. While sons and daughters pursue their own careers and futures, early retirees feel free to start up with new personal businesses or chase after their life-long passion, now that they are free from their 9 to 5 corporate job.
A global trend of early retirement has reached India
The FIRE (financial independence, retire early) movement is catching on in India. People seek for a stress-free, quality life with their families and personal passions, and early retirement is a key component of this new outlook. As more and more middle-aged people value time and life quality over luxury and possessions, financial planning for early retirement gains popularity.