In India, many people have started realizing that retirement planning is not just something to be delayed till old age. They are also becoming aware of the various benefits in terms of a better lifestyle and higher savings towards their retirement years. In this article, we will discuss some of the great benefits provided by early retirement planning.
ADEQUATE RETIREMENT CORPUS
One of the most rewarding benefits is that individuals can accumulate a huge corpus for their retirement. However, if the same person delays their retirement planning for ten years, they will accumulate less money than those who start planning early. Therefore, if you desire to lead a comfortable retired life, it is recommended that you begin generating a retirement corpus as early as possible.
THE POWER OF COMPOUNDING
Another advantage is that compounding will work in your favour in early retirement planning. Compounding is the power of earning interest on your previous returns, which continues until you are alive. The earlier you begin, the longer your investments will be working for you. Therefore, it is advisable to invest in the initial years of your career to get more returns on your money.
FOR UNPRECEDENTED EMERGENCIES
An individual is generally expected to incur more expenses towards his retirement years than earlier. These include spending more on health care and other emergency requirements. The earlier you start with your retirement planning, the better it would be for you to handle such expenses in the future. It is a wise idea to allocate a significant portion of your savings for major retirement-related expenditures in advance.
OPTIMAL WEALTH PRESERVATION
It is impossible to know what the future holds, and sometimes, even the best-laid plans may go haywire, resulting in significant wealth loss. In such cases, you should begin your early retirement planning. Such an approach will help you build up your cash reserves and invest in other income-producing assets like mutual funds, stocks, etc. This will help you generate additional income for meeting various living expenses. This way, you can successfully preserve all your accumulated wealth to date without experiencing much loss.
SUFFICIENT FUNDS FOR YOUR DEPENDENTS
Planning for early retirement helps you ensure that you have sufficient funds to take care of your dependents and loved ones. In addition, it pays to have a backup plan in case of emergencies and expenses that life may bring. Therefore, start investing early in various investment vehicles and diversify your portfolio. This will ensure the financial security of your dependents for their future needs.
YOU’LL HAVE MORE TIME TO SPEND WITH YOUR LOVED ONES
People who opt for early retirement planning get to spend more time with their loved ones. If you believe that your loved ones are your world, it makes complete sense to ensure that you enjoy their presence, company and love for as long as you can. A promising and happy career fulfils only half of our needs, while the rest depend on our loved ones and the relationship we share with them.
YOU CAN PURSUE OTHER INTERESTS AND PASSIONS
Early retirement planning opens up opportunities for individuals to pursue their dreams and interests, such as writing a book, learning a new language, or even starting their own business. There is no need to wait till you retire from active duty, and if you do not like the way you are spending your life, you can consider early retirement planning and change the way you lead your life.
All in all, it can be said that with early retirement planning, you can expect to live your life how you want to, with the freedom to do whatever you like. Furthermore, most of these benefits are long-term in nature and therefore cannot be easily realized if one delays their decision to begin their retirement planning right now. There is no fixed age for retirement and the right time to do so depends on your financial stability and financial goals. However, it is always better to start planning early and build a solid retirement corpus to care for your needs even after you retire from active duty. Achieving this goal as early as possible is always beneficial and has multiple advantages.