| <\/td> | Person A<\/strong><\/td>Person B<\/strong><\/td><\/tr>Age at which person starts Investing<\/strong><\/td>| 25 years<\/td> | 35 years<\/td><\/tr> | Investment amount<\/strong><\/td>| Rs.10,000 per month<\/td> | Rs.10,000 per month<\/td><\/tr> | | Years of investing<\/td> | 35 years<\/td> | 25 years<\/td><\/tr> | Retirement Corpus at Age 60<\/strong><\/td>| Rs. 5.8 Cr<\/td> | Rs. 1.8 Cr<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n The Rate of Return is assumed to be 12%. The power of compounding is demonstrated here as Person A had more time to invest his money.<\/p>\n\n\n\n <\/span>Now let\u2019s look at the steps for planning for your retirement:<\/strong><\/span><\/h2>\n\n\n\n\n- Start saving more. This might be an uphill task at first, but gradually you can get used to this. This can be done by reducing non essential expenses, taking public transport or carpooling, or by moving to a smaller city where the rentals are much cheaper than a metro. Mind you, these are mere suggestions. We are forcing people to move to smaller cities! Once you\u2019ve saved some extra money, don\u2019t forget to invest it properly.\u00a0<\/li>\n<\/ol>\n\n\n\n
\n- Rearrange your portfolio allocation. This is again subjective, depending on the person\u2019s risk appetite and return target. The portfolio could be a mix of equity and fixed income instruments in varied percentages. According to Nassim Nicholas Taleb, author of the famed \u2018The Black Swan\u2019 he advises using a barbell approach. This approach advocates that one should put 80% to 90% in extremely safe fixed income instruments and the remaining 10 to 20% in high risk high return diversified speculative instruments. In this way, your portfolio is robust to black swan events (events that are rare, but have a huge impact).<\/li>\n<\/ol>\n\n\n\n
\n- You could try to increase your retirement age. Since you might not have accumulated a high enough retirement corpus,by the age of 60, it would be in your best interest to work for a few more years, till you have enough to retire.<\/li>\n<\/ol>\n\n\n\n
\n- If your retirement calculations show that more active wealth needs to be generated post 60 years, then start thinking about which skills will be in demand from 10-15 years from now, which you can offer with your experience and creativity. <\/li>\n<\/ol>\n\n\n\n
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