Don't just save, do these 5 things from today itself, then your retirement will become 'future-proof'

Inflation reduces the power of your savings every year. If Rs 1 crore makes you a millionaire today, then after 30 years, this amount will hardly be enough even for middle-class expenses. Therefore, to make retirement 'future-proof', the right investment strategy is very important. Know those 5 things that can secure your financial future.

When most of us think about our retirement, a magical number comes to mind - 'one crore rupees'. The reason for this is that the value of a crore is still very high, and there are many people in India who are not even close to this figure. In such a situation, they feel that if they save Rs 1 crore till retirement, then life will be spent comfortably. Financial planners also often tell plans to create a fund of Rs 1 crore through SIP.

But before building castles in the air, stop for a moment and think that if you are 30 years old right now and you start retirement planning from now, then what will be the real value of that Rs 1 crore when you actually retire 30 years from now, i.e. at the age of 60? If you really want your old age to be comfortable and completely 'future-proof', then you must do 5 things from today itself.

First know the enemies of your savings

First enemy: Inflation

Inflation is that 'silent killer' which secretly keeps reducing the power of your money. In India, the average rate of inflation has been around 6% over a long period of time.

If we assume an average inflation rate of 6%, then:

The value of ₹1 crore after 30 years today will be only ₹17.41 lakh.

This means, the lifestyle that you can live today with Rs 17-18 lakh, will cost you Rs 1 crore 30 years later.

So, if you want your purchasing power after retirement to be equal to Rs 1 crore today, you will have to create a fund of about ₹5.74 crore after 30 years!

The second enemy: Rising health expenses

After retirement, our income stops, but there is one expense that keeps increasing with age - medical expenses. Medical inflation in India is around 14-15%, which is more than double the general inflation. Even a small illness or surgery can wipe out your lifelong savings in a few days.

How to make retirement 'future proof'

1. Upgrade your goal, include inflation

The first thing to do is forget your target of Rs 1 crore. Use an online 'inflation calculator' and understand how much money you will need after 20, 30 or 40 years as per today's expenses. Make an inflation-adjusted target, not Rs 1 crore, which may be Rs 3, 4, or 5 crore.

2. Start investing for the long term

It is wrong to rely only on savings account or FD for retirement. You have to choose assets that can give returns faster than inflation.

Equity mutual funds: Can give an average return of 12-14% in the long term (15-20 years).

NPS (National Pension System): Gives both tax benefits and market-linked returns.

SIP (Systematic Investment Plan): You can create a big corpus by investing a small amount every month.

3. Make 'Step-up SIP' your biggest weapon

It is natural to be afraid of such a big target. But the solution to this is also very easy. You have to increase your SIP amount every year along with your salary increase.

How it works

Suppose you start with a SIP of Rs 10,000 per month, in 'Step-up SIP' you increase your SIP amount by 10% every year (10,000 in the first year, 11,000 in the second year, 12,100 in the third year, and so on). Keep increasing the amount by 10% every year. This will help you reach your goal faster.

4. Do health insurance and medical planning

Your retirement fund of Rs 5 crore will also be useless if it gets exhausted in the treatment of a major disease. Therefore, do health insurance and medical planning along with retirement fund.

For this, take a family floater policy.

Add critical illness cover separately.

Get the health policy renewed before the age of 60 so that the premium remains low.

According to IRDAI data, medical inflation in India is increasing at the rate of 10-12% annually. That is, if an operation costs Rs 5 lakh today, then after 30 years the same surgery can cost up to Rs 80-90 lakh.

5. Create passive income sources

Depending only on savings and pension is risky. You have to create such passive income sources that continue even after retirement.

Rental income: Income from rent by buying property.

Dividend income: Dividend from shares or mutual funds.

Digital assets: Income like blogging, courses or books which give continuous cash flow.

If you have a fixed passive income of Rs 20,000 till retirement, you will get an additional Rs 2.4 lakh annually. This can make a difference of about Rs 50 lakh or even more during the retirement period.

What mistakes should be avoided?

Relying only on FD or PPF.

Delaying in starting investments for retirement.

Not taking health insurance.

Not creating a passive income source.

FAQs

Q1: Is Rs 1 crore enough for retirement?

No. Keeping inflation in mind, the value of Rs 1 crore will decrease significantly after 30 years.

Q2: How much money is needed for retirement?

It depends on your lifestyle. But generally, a corpus of Rs 5-7 crore is considered sufficient for retirement today.

Q3: When should retirement planning be started?

As early as possible. If you start at the age of 25-30, even small SIPs can create a fund of crores.

Q4: Why is health insurance necessary?

Because medical inflation is much higher than other inflation. The right health cover keeps your corpus safe.