Retirement Planning: Take necessary steps to make your dream come true, start retirement planning in time..

Retirement Planning: 'Retirement' is a word that often evokes anxiety and we assume it to be an event that will come after a very long time. But the truth is that retirement is not a number written on a piece of paper, it is about living a better and tension-free life away from your working years. You must think about the moments that matter in time. Like going on an adventure you have always dreamed of, or dancing at your grandchild's wedding. These moments are more than just a dream - they are the moments that give a goal or a purpose to any financial decision you make today.

As we delve deeper into retirement planning, one thing becomes clear - successful investing is not just about achieving financial goals. It is also about matching those goals with the goals that bring happiness and some purpose to your life. And the most effective way to do this is to create a picture of your future that is full of happiness and achievements.

Unable to make retirement planning decisions in time

Ajit Menon, CEO of PGIM India Mutual Fund, says that most of us are those for whom retirement planning is not the priority, they focus more on other needs before that. The PGIM India Retirement Readiness Survey 2023 has revealed that about 75% of people invest for emotional reasons, yet do not make timely decisions for long-term goals like retirement. Why? Because the human brain thinks more about getting present-time rewards. In such a situation, when we think about our future goal, which is 20 or 30 years later, then there is not as deep an association with it.

Linking Financial Freedom with a Purpose

Most people equate financial freedom with accumulating wealth, but wealth without purpose also feels hollow. The missing link in many retirement plans is the emotional factor. It’s the reason for saving that matters most and is deeply connected to it. While emphasizing on returns, time horizon and risk is an essential part of the process, we also need to bring in the emotional factor. Framing investments as tools to achieve personal happiness works better. For example:

A retirement corpus is not just a fund; it enables you to travel with your family, explore passions and live stress-free.

Annuity is not just a strategy for a steady income; it is your ticket to freedom and peace of mind.

By linking emotions to a financial decision, the planning process becomes much more meaningful. It transforms retirement from a daunting financial challenge to an opportunity to build a life you will cherish.

From a generational perspective

Each generation approaches retirement planning differently based on its unique challenges and values. Understanding these nuances helps in devising better strategies that are applicable across all age groups.

1. Baby Boomers (1946–1964)

For boomers, financial stability is important. With retirement at or nearing, many are focused on avoiding dependency on their children. They need straightforward solutions – such as predictable income arrangements and strategies to manage long-term risks. Products or features such as annuities and systematic withdrawal plans offered by mutual funds can be options to solve their problem.

2. Generation X (1965–1980)

Gen X is often torn between supporting aging parents and raising children. They face overload managing multiple financial responsibilities while preparing for retirement. For them, making decisions easier with structural tools such as “Save More for Tomorrow” plans or automated contributions can help. Goal-based labeling can be another solution to help them sync their investments with life goals.

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