Retirement Planning should be your biggest Financial Goal

Retirement Planning should be your biggest Financial Goal

How will your retirement look like? Have you thought about anything on retirement planning? This is something, which you should spend some time on. Our parents and grand-parents might not have given much importance to their retirement, they might have just took it as it came to them, but can we also afford to do the same with our retirement? Would you like your retirement to take shape just like your parents? Let’s discuss it and take some food for thought from this article today. This is the 3rd and last article in the series called “Financial Planning and Social changes in India.

In our country, where a very small number (less than 10% of the workforce which is in the organized sector) has access to some social security like provident funds, but the rest – almost 90% of the workforce – has no social security, Retirement Planning is a major issue. If you take care of your retirement planning, your future will probably be much better and in control than without doing anything. It has become extremely important to plan for one’s retirement and at least take a step towards it. I will list down some pointers which shows why retirement in future India will be much bigger and serious issue. Look at all the points in totality and you will realize that planning for owns retirement is not just an option but a necessity these days.

1.       Increase in life expectancy in India

One of the major problems while doing retirement planning is to assume how long the retirement will last. Retirement plan company this has a direct relation with life expectancy. As a country develops, its healthcare and overall life style level improves and life expectancy increases. You can see the life expectancy in India is moving up and up with each passing decade. It was 49 yrs in year 1970, increased to 64 yrs today in 2011 and is set to increase up to 73-76 yrs in 2040-50 (projections).

2.       Increase in Dependency Ratio

Dependency ratio means the ratio of Old age population vs. Young population. To calculate it, just take total population above Age 60 and divide it with population between 15 yrs – 60 yrs and you will get Dependency Ratio. You will be surprised to know that right now in 2011, the dependency ratio is around 5% in India, but in year 2050 this ratio will rise to 15%, which shows you that more and more people are going to be in the old age group compared to young population. See the chart below.

3.       Decline of joint family structure

If it was 1970, you could have safely assumed that you will be probably spending your retirement with your grown up kids, playing with your grand children, but is it happening anymore in these changing times? More and more people are moving in different parts of country in search of education, jobs and settling their compared to old times.


Parents on the other hand don’t choose to move most of the times as they feel connected to the same place where they have spend all their life and more than that , they have their social groups at those native places. Very rarely I have seen that parents leave those places where they have spent 30-50 yrs of their life.



Best Investment for your Retirement?

So what’s the best Investment you can do today which will make sure you live happily in retirement? If you thought that it’s some financial product or a strategy to make some extra bucks, you are wrong! I am talking about your Health here. Note that reaching destination is important, but after reaching the destination if you don’t feel joy and happiness and are not able to enjoy the fruits later, all the hard work you will put for reaching for destination will go waste. 


You will be living for 25-30 yrs minimum in your retirement, Now if you have all the money, but no proper health at the end, you will not be able to eat what you want, you will not be able to roam around places, you will not be able to enjoy each moment of your life, what’s the use of all your hard-earned money in that case?  I would say all your efforts will be waste. This is one serious point I want you to take home today. Think about it.