You are in a very interesting stage of your life once you get into your 30s. You have stability in your life, more spending power than in your youth and your career is taking a definitive step. However, with great stability comes great responsibility and you are expected to take charge of situations more now than ever. You want to secure your family’s financial future, provide the best possible health care for your loved ones and also ensure that all the major moments of their lives are never at the risk of being at risk because even the slightest of hiccups. You want to invest in the right policies, get the best possible insurances and on the whole make sure that your family is comfortable for a long period of time. While it’s great that you are taking care of everything, there is one more thing that you must add to the list of things you are planning for, which is your retirement. While it may sound a little strange, seeing how you are still in your 30s and the last thought on your head is retirement, this is the best time to actually go ahead and taking the necessary steps. Here are a few reasons you should start planning for retirement now!
Why you should start planning your retirement in your 30s itself!
1. Lower premiums
The biggest advantage of starting investments as early as your 30s is that you get higher covers for lower premiums on any of the policies that you want to go with. Any long term investment policy, like a ULIP, can be great to start off with at this age, where you don’t have to pay high monthly premiums in order to ensure greater returns when the policy matures. As you grow older, you will have to pay higher premiums to get the same returns on the same policies, further increasing the monthly financial burden on you.
2. Medical emergencies
While there is always the option of investing in a health insurance to ensure that the financial burden of any treatment is reduced by the insurance cover, there still are a certain medical emergencies that may require you to pay at least some part of the bills from your own pocket. In order to ensure that you don’t have to liquidate your assets if for some unfortunate reason the time comes to pay for any such emergency, you should have a steady source of money, which could easily be your retirement fund. Investing in the retirement fund early along with building up other financial assets can help you retire safely in the knowledge that the emergencies are taken care of without having to scamper at the last minute to liquidate the assets.
Inflation in India has been rising steadily at an average rate of 6.75%. While it does impact your day to day life, it impacts your retirement fund too. By the time you are at the age to retire, you need to make sure that the funds you have accumulated are enough to outlast your needs and the impact of inflation on all your expenses. If you begin saving up and making smart investments at this stage of your life, you are securing your post-retirement future without having to worry about the inflation impacting your retirement funds severely.
4. Tax Benefits
Planning for retirement in your 30s not only helps you secure your future, it also helps you reduce the taxes you have to pay annually. Under various sections of the Income Tax Act, 1961, several investment options are valid for providing tax exemptions to the investors. Investing in schemes like NPS, ULIPs, ELSS and others can give you a considerable break on your taxes. Best part is, the tax benefits aren’t just applicable on the premiums, with some investment options also being valid for tax exemptions on maturity.
So, don’t wait till you are close to retirement to plan for it. Plan for it right now and ensure a comfortable and financially post retirement life for yourself.