Are we saving Enough !!

[hender]

Are we saving Enough !!​

Or
only a small fraction of our income to retirement plans - indicating a potential gap between desired retirement lifestyle and the reality of own savings.

Here's a more detailed breakdown:

• Retirement Expectations vs. Savings:
  A large number of individuals in India, particularly younger ones, desire early retirement and anticipate a significant monthly pension. However, a considerable percentage of them are not saving enough to meet these expectations, suggesting a potential mismatch between aspirations and financial preparedness.
• Low Contribution Rates:
  A significant percentage of respondents, particularly those earning a substantial income, contribute only a small portion of their income (1-15%) towards retirement plans. This cautious approach to savings, while potentially influenced by financial constraints or other priorities, raises concerns about the adequacy of retirement savings.
• Awareness of Retirement Planning:
  While some individuals are somewhat aware of how their pensions are determined, a substantial portion admits to being completely unaware of the calculations involved. This lack of awareness can hinder effective retirement planning and may lead to insufficient savings.
• Need for Increased Savings:
  The current savings trends suggest that many individuals are not on track to achieve their desired retirement income. To address this, individuals may need to increase their savings rate, explore more effective investment options, and potentially consider delaying retirement.
• Recommendations:
  
  • Increase Savings Rate:
    Individuals should aim to contribute a larger percentage of their income to retirement plans, potentially following the 50/30/20 rule (50% for needs, 30% for wants, and 20% for savings and debt repayment).
    
    
  • Explore Investment Options:
    Consider diversifying investments beyond traditional options like EPF and PPF to potentially maximize returns and achieve retirement goals.
    
    
  • Seek Financial Advice:
    Consulting with a financial advisor can help individuals assess their current financial situation, develop a personalized retirement plan, and identify suitable investment strategies.
    
    
  • Start Early:
    The earlier individuals start saving and investing for retirement, the more time their investments have to grow through compounding returns.
  • 
    
  • What's your saving rate !!
  • (Concluding Part 2)

 

[rajcasio]

• Start Early:
  The earlier individuals start saving and investing for retirement, the more time their investments have to grow through compounding returns.

People at age 18+ think that it's too early to talk/think about RETIREMENT/SAVINGS/PENSION etc., and hope LIFE is SHORT.
As the media itself teach them LIVE TODAY, THERE IS NO TOMORROW.
Those who think that they are not going to live till retirement and spend on unwanted things will for 100% sure live longer than others and face the consequences

 

[Abhi21]

Oops! long post 😅

In today's world of Genz/Millennials/90's whosoever it may be they need everything to be fast paced rather learning and doing things in systematic way and doing on repeative basis along with sense of awareness and patience. And bec of this so called finflunencers in social media and ppl take adv of this and started to fall victim to it.

1) The first thing to do is in the world of savings, understand where you stand financially i.e salary and basis expenses which you can't avoid every month.

2) List all your expenses on daily basis (boring and repitative).

3) Evaluate where you can cut cost (Zomato, too much dining, watching movies including those high cost popcorn tubs combo, trips).

I repeat cutting down the cost and not removing entirely bec happiness is required and you should be at peace too.

Once you done you will know where your money goes and how much it's left in your piggy bank.

Savings part
1) First, whatever is your salary, there no rule of 50/30/20/10 or 80/50/30 or whatsoever bec everyone is different and everyone's family responsibility is diff, say 2 ppl earning in a family. In some case you will be only one. It depends.
A rough estimation of 10-12 lac should be your emergency fund. Few med expenses will go high enough and I know you will say insurance part (what if insurance says x, y, z reason and claim doesn't recieved or received little late) and mean time you need to tc of other expenses of EMI's, and someone falls ill or education fees comes up!

Rake it up by 5% every year in emergency fund no matter what.

2) Get yourself medical and life insurance.

3) Salary - Expenses = Savings ❌
Salary - Savings = Expenses
Keep savings constant every month.
Jab piche aag lagegi tho muh se dhua niklega tab you will think of all sorts of stuffs to increase your salary/income bec expenses increases every year (considering inflation, home expenses, education expenses and what not).

4) Once you know how much one can save now go ahead with investments.

i) After investment, you have to keep track of it every month no matter (Repitative sucks) but it what you will give you a grip to where your money goes and keep searching for new opportunities.
ii) Increase your investments by 10% every year.

5) Analyse your savings now, play the retirement calculator game with worst scenarios and can you achieve it by your dedicated time frame.
If yes
i) keep doing the same, Repitative and be patient and keep evolving at the same time
If no,
ii) you have to work hard my friend by switching jobs or increasing wealth by doing passive income jobs.

Conclusion.
Retirement is everyone's goal. Someone may reach earlier than you someone pushes hard and yet reaches late and someone couldn't handle the pressure and breaks. Remember everyone is unquie and so does their life. Never compare to anyone and just stick to your plan and move forward with hope, belief and self positive attitude.

All the best to those who wants to achieve financial freedom and Bholenath ki kripa and lakshmi mata ki ashirvad sab ke upar bharse and apko aur apke parivar ko sadev khushi se bhar de!

 

[cardio_guycardio_guy is verified member.]

Good post as usual.
In the world of credit cards where everyone flexes their EPM, Infinia, M4B and other ultraluxury cards, which is best for spending anything above 1-2L per month, if I tell about spending less, people will mock at me. 😀
Credit card community teaches us to spend more to earn more points, miles, and cashbacks. Why should we be so kanjoos and spend less? 😛

Jokes apart, my saving ratio is close to 80%. Agree to all the points told above by seniors.
I will say earn more, save more, invest more and spend more. Enjoy life.

 

[hender]

People at age 18+ think that it's too early to talk/think about RETIREMENT/SAVINGS/PENSION etc., and hope LIFE is SHORT.
As the media itself teach them LIVE TODAY, THERE IS NO TOMORROW.
Those who think that they are not going to live till retirement and spend on unwanted things will for 100% sure live longer than others and face the consequences

Correct 💯, Important is to understand about it and giving it due attention...

 

[hender]

Oops! long post 😅

In today's world of Genz/Millennials/90's whosoever it may be they need everything to be fast paced rather learning and doing things in systematic way and doing on repeative basis along with sense of awareness and patience. And bec of this so called finflunencers in social media and ppl take adv of this and started to fall victim to it.

1) The first thing to do is in the world of savings, understand where you stand financially i.e salary and basis expenses which you can't avoid every month.

2) List all your expenses on daily basis (boring and repitative).

3) Evaluate where you can cut cost (Zomato, too much dining, watching movies including those high cost popcorn tubs combo, trips).

I repeat cutting down the cost and not removing entirely bec happiness is required and you should be at peace too.

Once you done you will know where your money goes and how much it's left in your piggy bank.

Savings part
1) First, whatever is your salary, there no rule of 50/30/20/10 or 80/50/30 or whatsoever bec everyone is different and everyone's family responsibility is diff, say 2 ppl earning in a family. In some case you will be only one. It depends.
A rough estimation of 10-12 lac should be your emergency fund. Few med expenses will go high enough and I know you will say insurance part (what if insurance says x, y, z reason and claim doesn't recieved or received little late) and mean time you need to tc of other expenses of EMI's, and someone falls ill or education fees comes up!

Rake it up by 5% every year in emergency fund no matter what.

2) Get yourself medical and life insurance.

3) Salary - Expenses = Savings ❌
Salary - Savings = Expenses
Keep savings constant every month.
Jab piche aag lagegi tho muh se dhua niklega tab you will think of all sorts of stuffs to increase your salary/income bec expenses increases every year (considering inflation, home expenses, education expenses and what not).

4) Once you know how much one can save now go ahead with investments.

i) After investment, you have to keep track of it every month no matter (Repitative sucks) but it what you will give you a grip to where your money goes and keep searching for new opportunities.
ii) Increase your investments by 10% every year.

5) Analyse your savings now, play the retirement calculator game with worst scenarios and can you achieve it by your dedicated time frame.
If yes
i) keep doing the same, Repitative and be patient and keep evolving at the same time
If no,
ii) you have to work hard my friend by switching jobs or increasing wealth by doing passive income jobs.

Conclusion.
Retirement is everyone's goal. Someone may reach earlier than you someone pushes hard and yet reaches late and someone couldn't handle the pressure and breaks. Remember everyone is unquie and so does their life. Never compare to anyone and just stick to your plan and move forward with hope, belief and self positive attitude.

All the best to those who wants to achieve financial freedom and Bholenath ki kripa and lakshmi mata ki ashirvad sab ke upar bharse and apko aur apke parivar ko sadev khushi se bhar de!

Very well said each and every point ☝️...
Few things are expressed in context for a basic understanding, not limited or fixed to adhere that ONLY....
Have seen people with Lakhs of Salary not saving that much but the people earning 1/5 or 1/10 saving more...

 

[hender]

Good post as usual.
In the world of credit cards where everyone flexes their EPM, Infinia, M4B and other ultraluxury cards, which is best for spending anything above 1-2L per month, if I tell about spending less, people will mock at me. 😀
Credit card community teaches us to spend more to earn more points, miles, and cashbacks. Why should we be so kanjoos and spend less? 😛

Jokes apart, my saving ratio is close to 80%. Agree to all the points told above by seniors.
I will say earn more, save more, invest more and spend more. Enjoy life.

👍💯
Congratulations 🎉 of that 80% ratio..
Show-off/ FOMO effect is the baseline of this mindset ...

 

[panchabhut]

As someone who is already on the wrong side of 50, my two cents,
Post retirement, the main requirements are residence & medical. As we grow older, food and other lifestyle requirements significantly come down. Excluding residence, min 20% of monthly expenditure would be for regular OPD medical expenses.
So first to identify, before the age of 30, the location where a person wants to spend the retired life. As medical needs will increase, choice can be for locations with good medical facilities and then get a residential property there before turning 30. By the age of 50, EMI gets paid and main cost is taken care of. Even if one is staying there during working life, it can generate rental income to offset EMI. Part of the surplus income can also be used to part- prepay the loan, several times if possible and close the loan at the earliest.
Then to take a pure-term policy to cover future income risk and the value of of the housing loan.
Then, before the age of 45, get medical insurance, so that, by the time one retires =, all "per-existing" diseases are within the coverage.
Keep record of all expenses and identify the unnecessary ones. Find ways to cut cost, including getting discounts/cashbacks for regular expenditure.
At least 30% of CTC should go to long term investments including PF, NPS etc., either trough employer or directly.
For the rest, depending on monthly surplus, investments can be diversified into short & medium term ones. The medium term investments would help to fund future needs for children's higher education etc.

 

[hender]

As someone who is already on the wrong side of 50, my two cents,
Post retirement, the main requirements are residence & medical. As we grow older, food and other lifestyle requirements significantly come down. Excluding residence, min 20% of monthly expenditure would be for regular OPD medical expenses.
So first to identify, before the age of 30, the location where a person wants to spend the retired life. As medical needs will increase, choice can be for locations with good medical facilities and then get a residential property there before turning 30. By the age of 50, EMI gets paid and main cost is taken care of. Even if one is staying there during working life, it can generate rental income to offset EMI. Part of the surplus income can also be used to part- prepay the loan, several times if possible and close the loan at the earliest.
Then to take a pure-term policy to cover future income risk and the value of of the housing loan.
Then, before the age of 45, get medical insurance, so that, by the time one retires =, all "per-existing" diseases are within the coverage.
Keep record of all expenses and identify the unnecessary ones. Find ways to cut cost, including getting discounts/cashbacks for regular expenditure.
At least 30% of CTC should go to long term investments including PF, NPS etc., either trough employer or directly.
For the rest, depending on monthly surplus, investments can be diversified into short & medium term ones. The medium term investments would help to fund future needs for children's higher education etc.

Wise and curated action plan, with emphasize on practicality. Thanks for sharing your input..

 

[Exewhyzee]

People coming from middle class background, having seen their parents working hard generally have a good financial discipline. They do not invariably need to do a separate retirement planning imo. They generally save enough throughout their lifetime due to their mindset.