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5 Tips for Young Professionals to Plan for Retirement

Nov 13, 2019 | 5 months ago | Read Time: 3 minutes | By iKnowledge Team

Early to bed and early to rise makes a man healthy, wealthy and wise – you must have heard this English adage many times in your life. Did you know that it applies to financial planning as well? When you start planning early, you can lead a healthy, wealthy and peaceful life after your retirement.

As a young working professional, you should start planning for your retirement right away, so that you have enough funds to continue the same lifestyle as before, even after you have retired. With these structured financial plans in place, you don’t have to worry even when you don’t have your monthly income to support you.

Here are 5 tips that will help you plan for your comfortable retired life:

  • Clear financial goals

You should be clear about the money that you want at each stage of your life if you want to draft a well-structured financial plan. Different individuals have different financial commitments; therefore, it is highly recommended that you consider this step. If you have just started earning, it is best to make a checklist of the amount that you would need to meet various goals such as building a home, marriage, education of kids, medical expenses and maintaining the same lifestyle post-retirement, etc. These goals will help you park your savings in the right sources so that you can use it when it is the right time to meet each goal.

  • Insurance

Insurance should be an integral part of your financial plan. A good plan is one that considers all contingencies possible. Insurance is the best way in which you can ensure financial protection for yourself and your family, in the unfortunate event of an emergency. Having a good life insurance and health insurance policy is a must if you want to ensure that your retired life is free of hassles and discomfort.

  • Clever Investments

Young professionals should choose their investments clearly so that they can get enough returns to meet the financial goals during different stages in their lives. A ULIP investment is considered to be the best among all long-term investments because it gives you the dual benefit of insurance and investment. A ULIP invests the amount that you pay in different funds based on your risk profile and gives you good returns at the time of maturity.

You also get tax benefits on it, which is what makes it a good choice for young earners to lock their funds in.

  • Making good use of retirement calculators

Do you have a retirement age in mind? If yes, you need to make use of a retirement calculator to get an idea of the corpus that you would need to live comfortably and follow the same lifestyle as before, even after you have retired. When you feed in key details like your current age, retirement age, current income, expenses and savings into the calculator, it will give you an estimate of the amount that you need post-retirement to lead a happy life. It will also tell you the monthly savings that you have to set aside to achieve that corpus. If you don’t want your monthly savings to bite into your budget too much, it is highly recommended that you start saving for your retirement, as soon as you start working.

  • Review of financial plans

It is very important to revisit your financial plans every year and make changes in them if needed. If you have had a salary increase, you may consider increasing your monthly savings correspondingly. You can also analyze the market performance of your ULIP and switch the funds in your portfolio to get more returns than before. You may also increase your insurance premium payments to get more coverage for yourself and your family.

While it is important to have a proper financial plan in place, it is more important to have this as early as possible. This is because as a young professional, you will get the luxury of staying invested for a long time and reaping good returns by the time you retire. To know about Aegon Life Insurance products like term insurance and retirement plans, visit our home page.


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