Best Time for Retirement Planning – 10 Years Back. Next Best Time – Today

For most people in their 40s and 50s, the best time for retirement planning was 10 or even 20 years back. However, if you have failed to do so, you can always start now. It is never too late to secure your future or retired life.
Best Time for Retirement Planning - 10 Years Back. Next Best Time - Today

If you are worried about your retirement plan even though you are decades away from it, you are probably on the right track. Retirement is an important stage in our lives that should be planned out well and at the earliest. This is especially due to a lot of retired professionals being unable to actively earn money as they could while they were young. There are both government schemes and private companies offering great retirement benefits. You can truly benefit from these opportunities if you start in time.

Most of the time, saving money through the bank is not enough and also does not compound enough to beat inflation. Retail inflation has risen by 5.59% during December 2021. Just the CPI (Consumer Price Index) Food inflation has gone up by 4.05% in December compared to 1.87% in November of FY 2021 – 2022. Meanwhile, banks generally only offer us 2.50% p.a. to 3.50% p.a. interests on the money we keep with them.

Even though Fixed Deposit schemes almost are at par with inflation (offering around 2.50% p.a. to even 5.75% p.a. returns), it is still not enough. Consider that there are also taxes and other economic factors that erode your returns over time. Thus, it is always best to employ the help of schemes that are specifically designed for retirement and that come with a list of retirement and tax benefits. These schemes reduce the taxable earnings of an individual. What is even better is that the earlier you start, the cheaper the premiums will be. For example, retirement schemes will be much cheaper for a 20-year-old as compared to a 50-year-old. This is because age is counted as a factor while determining the amount of premium to be charged. Also, the sooner you start to save, the more money you will end up saving and the longer will be the time horizon for you to gain the benefits of compounding.

Let us understand how retirement planning differs in every stage of your life.

Retirement planning during your 20s

During this stage, most people generally wish to enjoy their lives and have fun. However, it is important to strike a balance. If you decide to start saving or investing money now, it cannot get better than this. At this age, one is generally free from family responsibilities, such as paying for your children’s education or EMIs for a house or a car. The total sum you can save up is incredible. You will also be enjoying very low premium amounts due to your age.

5 habits to build a healthier and wealthier 2022 – Read our article on the TejiMandi blog for expert tips!

Retirement Planning During your 30s

By this age, you need to start taking care of your family or start planning for marriage or even kids. Thus, you have more financial responsibilities as compared to those in your 20s. However, this can still be considered an early start as the financial burden is still quite less than later stages when you would have grown-up children who need to go to college. You have a lot of time to build up the corpus amount even if you invest a little bit of money every month or every year into your retirement plan.

For starters, you can set aside an amount to invest in equities for the long term. You still have a long time horizon over which you can benefit from the effects of compounding. TejiMandi helps you navigate through the stock market. The experts help you find the stocks that suit your risk profile and keep you on track to reach your financial goals.

Apart from this, you can also open a Public Provident Fund account. It is a safe investment, especially for salaried individuals. It also comes with tax benefits, allowing you to claim a deduction of up to Rs. 1,50,000 based on your investment.

Retirement Planning During your 40s

By the time you are 40, you only have 20 years for cashing out a substantial sum after retirement. Even though experts consider this to be a long enough time period, it will still provide much less than what you could have built up if you started 10 or 15 years earlier. Also, during this age, you will experience a lot of financial burdens such as the higher education of your children or expenses to run your household generously. Even if you do not live an extremely lavish life, living a good life with a family of three or four is quite expensive, especially if you live in a Tier-1 or Tier-2 city.

Your household expenses would increase even more if you have old parents to take care of. There are also other expenses such as medical bills that can suddenly emerge. You must save up enough for that or have a good health insurance policy. The responsibilities just keep increasing with many bills to pay and this is why it is essential to start preparing when you are younger.

Your 40s is a good time to invest in mutual funds. You can also opt for direct investing in equities through investment advisors for a better and safer return. Moreover, focus on having a diversified portfolio, which has a good mix of debt and equity. TejiMandi helps you build a portfolio that keeps in mind the risk you can undertake, while also providing the highest possible returns.

Retirement Planning During your 50s and Beyond

By your 50s, it is already quite late. But as the saying goes, it is better done late than never. At this stage, you will be required to pay hefty premiums and to save aggressively in order to secure a good sum during retirement. Your children will be grown up and start earning on their own. So some financial responsibilities do decrease, providing another opportunity to invest a large chunk of your earnings towards your retirement. However, you should use this time wisely, as you are left with only a few years to avail some benefits.

Some of the safest investments that you can put your money in include Provident Funds. Keeping this in your portfolio is extremely beneficial because of the secure and stable returns. However, you must not rely on it. It is good to have some equities that have shown good results consistently and are relatively less volatile.

Moreover, investing in Government securities such as Treasury Bills and other money market instruments is also a good option. You may also invest in corporate bonds that pay regular dividends.

Employ an asset allocation strategy to manage your portfolio better. It allows you to safeguard your investments and also benefit from short-term upward trends. Understand how to successfully allocate assets in your portfolio in our blog here.

Apart from this, try opting for deferred annuity payouts so that you gain more interest while saving on taxes. If you are a widower, there are many pension schemes that will provide you with a source of income for the entirety of your life. Otherwise, with your spouse or children as nominees, you can set up a scheme that, upon your death, will return the total premium you have paid.


The value of money will keep decreasing while the cost of goods and services will keep going up. . Savings are great but are not enough on their own. That is why it is absolutely essential to prepare for a well-planned retirement.

Signing up for solid retirement schemes and religiously maintaining them is crucial for living a stable and enjoyable post-retirement life. This is especially true for people who expect various costs such as house maintenance, car maintenance, fuel, outings, fine dining, and even international trips. Thus, it is best to not push planning your retirement any further. The early you start, the closer you are to a comfortable, if not lavish, post-retirement life.

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