A survey revealed that Indians below the age of 55 thought that they would need 71 percent of their current salary to help them retire comfortably post 60. The truth is that you need to plan for retirement in order to lead a life of comfort in your old age. Else you could be in for an unwanted surprise. Wondering how to go about this? Well, by wisely practising some retirement planning . Here are a few tips that can help you retire comfortably:

If you are a salaried individual, then 12 percent of your basic salary and an equal amount from your company goes towards your EPF. While this forced saving, can be a default plan for retirement, don’t just rely on it alone. If you are self-employed, invest in NPS or PPF both of which come with a lock-in period and offer good returns. The earlier you start saving, the more corpus you can build for your old age. The idea is to inculcate the habit of saving regularly for the long term.

When you get a salary hike, and your take-home salary goes up, you give a treat to your friends, right? But do you remember to treat yourself by increasing your allocation to savings and up your investment game? If the answer is no, you might be in trouble when you retire. Rising inflation and the corresponding increase in the cost of living might have already nullified your pay hike. You cannot avoid them; however, keep saving more and increasing your investment every year. It is a smart move towards retirement planning.

Taking a chance in the stock market at the age of 60 would be like going bungee jumping at the same age. Just as you would be averse to take a risk with your health, you would not want to mess with your money. So, follow the 100 minus age rule to plan for retirement. If you are 30, invest 70 percent of your portfolio in equity related investments and keep reducing this with age. This not only helps minimize risk, but also lets you get good returns from an asset class such as equity which can give good returns over the long term.

You might want to go on that trip to Europe or buy that expensive home theatre, the temptations can be many. You might also need money for the marriage of a child, medical emergency or to build a house. However, remember that if you dip into your savings now, you might gain little from the power of compounding. Also, you might have to double your savings to reach the same investment goal. This could set you behind several steps on your retirement planning. A health or a critical illness insurance can be an option to this.

Souvik was a happy go lucky architect in his 30s, married with a kid. He was also taking care of his aged parents. When he got a promotion, he invited a few colleagues over for dinner at his house with their families. When a colleague casually asked him about his plans with the increased income, he said he would save more. The colleague said that he was thinking of buying term insurance and explained why. This was when Souvik understood what a mistake he had made. Would you want your family to be dependent on someone else for every penny in your absence? No. Term insurance is the key to making sure your family stays financially protected, even when you are not around.

Increasing life expectancy means that you might have more years to live after you retire. However, rising inflation and cost of living can cause erosion of your wealth and eat into it. If you want to retire comfortably, be sure to withdraw only 5 percent of your total wealth in the first five years after retirement. By the time you are 70, you can increase this to 10 percent. While at 80, drawing out even 20 percent is fine.

Managing your finances and making wise investment decisions in your working life are key to plan for retirement that is comfortable and you retire rich . However, amidst all this, make sure you buy term insurance to protect your loved ones from any untoward difficulties in the future. Rest assured, you might live a long life and revel in the joy of seeing newer generations before you in the golden years of your retirement.