In old age you will have so much money that you will not be able to handle it, just keep these 4 points in mind while doing retirement planning.

While doing retirement planning, you must keep some things in mind so that you have an idea of ​​how much money you will need to live a good life at that age and how to prepare that amount. Here know those 4 points which should be in the mind of every person.

In today's time, a wise person is the one who starts planning for his retirement from the time of job because in old age you will not have a source of income, then only your savings will be useful. But while doing retirement planning, you must keep some things in mind so that you have an idea of ​​how much money you will need to live a good life at that age and how to prepare that amount.

The more wisely you plan by thinking about this, the better funds you will have. Here, know those 4 important points that any person must keep in mind before planning for retirement and should prepare accordingly. If you do this, then by old age you will accumulate so much money that it will not be easy for you to manage it.

First of all, do this calculation.

Today, if we talk about 1 crore rupees, then it seems like a very big amount to us, but after a few years from today, its value will not be very high. Keeping this in mind, you will have to accumulate so much money, which has a good value at the time of your retirement age and accordingly, you will have to decide the strategy of savings and investment. Now the question is how will you know in how much time the value of your deposited capital will be? For this, Rule 70 will help you. It tells that in how much time the value of your deposited capital will be halved. For this, you should know about the current inflation rate. When you divide the current inflation rate by 70, the number that comes out will tell you in how many years the value of your total savings will reduce to half.

Understand with an example- Suppose the current inflation rate is 6 percent. In such a situation, apply the formula and divide 70 by 6. 70/6 = 11.66 i.e. in about eleven and a half years the value of your savings will reduce to half. Meaning if one crore rupees is needed to live a good life today, then after about eleven and a half years from today you will need two crore rupees for a good life because then the value of one crore will be equal to 50 lakh rupees. By calculating in this way, you will have to get an idea of ​​how much money you have to save for yourself till the age of retirement.

Recognize the power of compounding.

When you have an idea of ​​how much money you have to save till the age of retirement, then you will have to save that much money as savings and invest it. Invest in places where you get the benefit of compounding interest. Compounding can convert investments into wealth. In this, you get interest on the investment amount as well as its interest. The longer you invest, the more you can benefit from compounding. In such a situation, as soon as you start a job, invest as much as possible in schemes that offer compounding benefits such as PPF, NPS, SIP, etc. Apart from this, employed people can also increase their investment in EPF through VPF and can add a good retirement fund through this.

Make sure to keep variety in the portfolio

It is said that all the eggs should not be kept in one basket. The same rule applies in the case of investment as well. Therefore, never invest all the savings money in a single scheme. Divide that money and invest it in different schemes. This is a safe and smart way. Keep this in mind very well.

Remember the 20 percent savings rule

You should get into the habit of saving as soon as you earn your first income. For this, keep the 20 percent rule in mind. The financial rule says that every person should save 20 percent of his income and invest it. In such a situation, if your salary is Rs 40,000, then you should invest Rs 8,000 out of it in any case. As your salary increases, your 20 percent share will also increase. If you invest by following this rule, then you can accumulate a good amount of money in the coming 25 to 30 years.