All posts tagged: retirement

What is the Right Way for the Twenty Something’s To Spend Money

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When you are in your twenty’s, you get perpetual recitations on money saving and management This indeed is a great thing, because an advise like this is always treasure worthy.

However apart from managing finances and saving money, it is also crucial to master the art of spending right. Let’s discuss about where you should be spending your money.

Health Insurance

Health is something that should be kept on top priority. You might not want to think about health when you are young, but health insurance is one of the things 20-somethings should spend their money on. While being a student you maybe covered under your parent’s health plan. However beyond that stage, you need to invest in order to be better prepared when an emergency strikes.
Medical bills are scary, especially when they get piled up. So it is imperative to sort out these finances in order to escape the last moment distraught.
From personal experience, one trip to the emergency room can cost thousands of dollars, which can easily deplete your savings account.
Even if you can’t afford the best coverage, some coverage is better than none.

Life Insurance

There are various life insurance policies to opt for in india.
Life insurance is relatively cheap if you’re a young adult with no major health problems.
If you’re single with no dependents, you may feel life insurance is unnecessary at this point in your life. However, a policy can pay off your debts.
Plus, the death benefit can cover your funeral and burial, taking the financial burden off your family.

CIBIL Monitoring

You should monitor credit report once in a year. This helps in keeping a check on your credit scores.
Even if you do not have a credit history or a long credit history, it is imperative to stay on top of your report. Erroneous credit has many implications on future loan requests and applications.
You can evaluate your credit once on CIBIL by paying Rs 550. Then there are different plans that you can take to monitor your account at regular intervals.

Building a retirement account

Retirement is a far-fetched idea. Thinking about retirement is one of your least priorities.
However money grows exponentially if you start investing at the right time. This would create a very comfortable and at ease retirement phase for you.
For retirement plans check our blog http://earlysalary.com/planning-for-retirement/

Investing in property

Most of you twenty-something’s would not think of buying a home. A rented space is what you need at this stage.
However with approaching stability and firm finances, thinking of investing in property is a great step indeed. This helps in safeguarding your future
You can build equity, and when you’re ready to sell your starter home, you can put the proceeds down on a nicer place..

Investing in reliable and cost-effective vehicles

It is a sensible decision when you choose to buy a vehicle that is both reliable and cost-effective.
You need to avoid buying new used cars, or stop dealing with numerous repairs that drain your pocket. A wiser decision is to purchase a newer model car that requires optimum maintenance. You can pay off the loan for the car gradually.
Money can be employed in various ways. But the best ways are something that you need to seek out. This helps in planning your present and future in a much better fashion.

All posts tagged: retirement

Planning for retirement

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“Retirement” .Do we need to think about it at all? If no, then perhaps now is the time to stop giving a cold shoulder to it.

Being ignorant does not help carve a secure future.

Though we are young and quite able at this stage in our lives. But do we think of times when “un” gets added to our ability.

Reality covering us from all four sides has changed now. We cannot wait till the RIGHT age.

Money control and Money management is imperative and so is wise investment.

We would want to jot down some essential tips that would assist you better with financial planning.

Compounding it is!
One of the strongest instruments in the financial world is compounding.
So how do we go about the process?

Start investing early, even if it is Rs10,000 a month, go for it. Putting in a small amount is okay, what is critical here is the interest that compounds with the passing time.

Also,Save your bucks! Saving is always a great idea to keep. Saving not only for retirement but for other purposes aids at various stages of our lives. The sooner you start saving , the more time your money has to bloom. Pooling in some money for retirement should be your utmost priority. Financial Goal setting is important, however sticking to those goals, and not wavering is even more critical.

It is time to go digital!

Start using an e-wallet!
This has advantages of cash back and it is safer
The flexibility, security and the usability of the wallets have cemented faith in the people using them. You can put an amount as tiny as Rs 10 to Rs10,000.
Convenience blended with rewards incites people to use it again and again.

Sail the boat of Direct mutual funds!
Investing in direct plans of mutual funds renders higher returns. The difference in returns is more pronounced in case of equity funds. In debt funds the the returns are moderate in amount. And the returns are the lowest in liquid funds out of the three.

Swap Fixed Deposits with Debt Funds!!
Safety and Fixed deposits go hand in hand. However when it comes to tax benefits, they are not very efficient. A better path to tread on is Short-term debts, that has the combined credit risk almost equal to FD’s. Though there is not a vast difference on the interest rates generated on short-term debt funds, however the actual return on these is much if they are held for a span of more than three years

Brick a building of buferable cash!
The economic conditions waver like the wind. For example, a hike in prices in the US can subsequently leads to a market fall in India!
Having some cash as buffer, will be handy in such situations. This money can be used to buy at cheap rates and sell at higher rates.

Be wary of Debts/Mortgages!
Being freed of mortgages or any lingering mortgages is a fantastic step towards retirement planning. You do not want to get nightmares of debts when you are greying.

Also lets chart out a plan for someone who is close to us and has just entered his/her retirement phase We will go step by step.
1. Firstly we need to calculate their monthly expenses and needs
2. We then come to her various sources of income
3. Changing their status in the bank is a wise option. Transfer their corpus to a senior citizen savings account. That gets better interest.
4. Get their 15H form signed and deposited at the Bank so TDS in not deduced at source on her FDs. This also reduces agony of chasing for Tax refund.
5. Go for opening a Mutual Fund Folio. Do you know once you have done a KYC with one Mutual fund, it is valid for all investment across all Mutual funds.
6. Divide their portfolio into Four segments
6. 1 Monthly income (if pension is not there or less) – In Fixed Income Mutual funds go for a standing instruction to transfer a fixed sum to their saving account monthly.
6.2 Diversify Equity Mutual funds for long-term steady income
6.3 Invest 10% of the corpus in Blue chip companies
6.4 Build an Emergency fund
7. Activate confirmation emails and SMS on your and their phones
8. Make sure their health insurance plan is secured.
9. Ensure all assets have nominees as per their wish.
10. Make their will

Retirement is the a faraway destination, but we need to cement a path from now to reach there in a financially healthier state.
We hope that our recommendations will help you in deciding clearly and taking informed steps.

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