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Last few days, the news of a famous comedian and actor going to jail in a check bounce case shocked everyone. Even people who appear very successful from outside sometimes fall into the trap of financial crisis and debt. This incident brings out the bitter truth that good earnings alone do not guarantee future security. This incident is a big lesson for the common man. When your regular income stops, but daily expenses keep increasing, then the real trouble begins. To live a happy life after retirement, the biggest need is to start the right investment at the right time.

Retirement planning is not just savings, it is a weapon to fight inflation.

Often young people in their thirties think that there is still a lot of time for retirement. But this delay puts huge financial pressure on them in future. Retirement planning is not limited to just saving money. Its main objective is to create a strong fund that can easily handle your expenses despite rising inflation.

The biggest disadvantage of starting investing late is that you do not get the full benefit of compounding. As time passes, inflation makes your retirement goal larger. In such a situation, if you start investing on time, money itself starts working for you.

Mathematics of reaching Rs 1.5 crore from investment of Rs 5 lakh

Suppose you are currently 30 years old and you are planning to retire at the age of 60. You have full 30 years time to invest. If you invest a lump sum of Rs 5 lakh in a mutual fund today, this amount can do wonders in the future.

If this lump sum investment gives an estimated average return of 12 percent annually, then after three decades this amount will amount to approximately Rs 1.50 crore. Through the power of time and compounding, even a small amount can become a strong support for your old age.

Regular income of Rs 1.75 lakh every month after retirement

After the job ends, the investment perspective changes. Then getting regular and secure income is more important than increasing the capital rapidly. For this, transferring your funds of Rs 1.5 crore to a conservative hybrid mutual fund is considered a safe option.

Hybrid funds have less risk as a major part of it is invested in safe debt options. After this you can choose the option of Systematic Withdrawal Plan i.e. SWP. Suppose after retirement you get an annual return of 8 percent on this safe fund.

If you withdraw Rs 1.75 lakh every month for your expenses for the next 10 years, then this will be a total withdrawal of Rs 2.10 crore. Nevertheless, your principal fund will also keep growing thanks to the 8 percent return. With the right strategy and starting early, financial worries of old age can be eliminated.

Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money related decisions.