Planning Early Retirement in India

How do people plan Early Retirement in India

Do you want to plan an early retirement in India and live a rich retirement? Here are few tricks people do different from all, to retire early and live a rich life.

Retirement? Now? That’s a far sight. But Not

Well, not necessarily. You can retire early if you plan systematically.

I don’t think anyone I know would ‘choose’ to work for the next 40 or 50 years of their life only to retire at an age when the body becomes too exhausted.

Let me ask you, would you want to wait till you’re 65 to retire?

It is often assumed in India that you cannot and must not retire too early. But truth be told, if you plan systematically enough and tap resources which give you passive income, you can retire at any age you desire.

It is difficult, but not impossible. *inserts some motivational quote here*

What do numerous early retirees have in common to successfully plan an early retirement in India? Let’s have a look:

1. They begin early 

How do people plan Early Retirement in India - start early

Suppose you want to retire at 50. At the moment, this may appear impossible, but if you start today, or better yet, start now, this is achievable. 

For instance, you start a retirement fund as soon as you graduate i.e. at 21. In that case, you will still have 29 years to grow your cash.

Even if you contribute as little as Rs.1, 000 per month to a separate, dedicated fund, through smart and aggressive fund, you can develop a huge retirement corpus.

In short, the takeaway from this point is that you need more ‘time’ than actual ‘cash’ in order to become rich. Begin saving and investing on the right time and you’ll be golden (read: rich!)

2. They save a lottt 

Save a lottttt

You’ll always be unable to retire early if you are not willing to set aside cash for your retirement. Starting little is good, but if you are serious about early retirement in India, you must plan big. You must try and make bigger and bigger contributions to your retirement fund. 

In fact, if you find it difficult to take out a major chunk of your income every month, you can set up automatic transfers and save money on autopilot using the Bachat app.

Furthermore, they maintain a strategic distance from exorbitant expenditures and instead, save that money for their retirement. 

Numerous experts prescribe saving around 20 percent of your monthly income. But, that is for general purposes. In the event that you are planning to retire early, you must aim to save at least 25-30 percent of your monthly salary, if possible.

3. They buy what they can afford easily

Buy what you can afford

The most financially-aware people know very well the amount they earn and hence never, I repeat, never spend more than what they afford to.

This means that they plan their monthly budgets which include heads like groceries and entertainment very cautiously.

They avoid huge and expensive buys and look for discounts and coupons when making absolutely necessary purchases.

Those individuals who truly live within their means are open to make small compromises in their daily life. That is, they can easily compromise eating out and opt for cooking, live in a smaller flat rather than own a lavish bungalow etc.

4. They avoid living in expensive homes 

 How do people plan Early Retirement in India - avoid living in expensive homes

Numerous individuals have ended up in budgetary crises because they purchased a house that was way too expensive for their income level.

The individuals who retire early keep their housing and accommodation costs as low as possible. In order to ensure this, they pay a sizeable down payment at the time of purchase only. This leads to lower monthly installments.

Liberating yourself from high housing costs means you can use that cash to save and invest. 

5. They invest smart 

How do people plan Early Retirement in India - invest smart

Investing and assuming risk are two essential steps if you want to develop a large retirement fund. Individuals who retire early invest smartly and put their funds into aggressive investments so that they can multiply their money rapidly.

Along with investing in aggressive investments, they also diversify their portfolio in order to insure themselves against sudden and huge stock market dips.

6. They evade financial disasters 

Evade financial disasters

Collecting funds seems all fun until you hit a financial disaster. To avoid financial disasters, follow these smart guidelines:

  • Maintaining a strategic distance from risky investments will shield you from losing huge amounts of cash if the stock market crashes. 
  • Having a sizeable emergency fund will help you face all surprising costs without panic. To know more about emergency funds, read A Complete Guide on Emergency Funds
  • Having good insurance policies and coverage, especially medical, will spare you huge amounts of money in times of emergencies.

You can’t get rich in the event that you lose a decent piece of your cash all at once due to a financial disaster, so you must ensure that you shield your money well to achieve early retirement in India.

7. They keep a track on their net worth

How do people plan Early Retirement in India - keep a check on net worth

Net worth is a typical method that compares what you have right now and how much do you owe right now, without factoring in your income. 

It’s determined by essentially taking the estimation of your assets (i.e. what you own) and subtracting your liabilities (i.e. what you owe). 

Your income doesn’t factor into this condition by any means—it’s only a measure on what you have right now versus what you owe. 

The reason net worth is a very practical approach to judging your financial situation is that it enables you to make a valid comparison between your current status and past status.

People who retire early constantly keep a tab on their net worth and its growth.

8. They avoid debt

How do people plan Early Retirement in India - avoid debt

It’s impossible to save with a debt-bulb hanging from your financial ceiling. 

Numerous Indians struggle to save because they are submerged in huge piles of debt. 

It is essential that you understand that people who retire early have a priority: to pay off debt as soon as possible. In order to retire early, you must repay your debt quickly or rather you must avoid taking debt as far as possible.

If you wish for an early retirement in India, bid goodbye to debt.

9. They work day and night alike

How do people plan Early Retirement in India - work day and night

Retiring early requires one to earn a great deal of money very early on in life. This doesn’t come easy. People who retire early work day and night alike without thinking about the number of hours they have contributed.

This implies working your…..well, brain off!

Except if you’ve been on the receiving side of an immense inheritance, you will have to really, really work hard in order to retire early.

10. They discover passive income sources

Retiring means you’ve stopped working. It doesn’t mean that you’ve stopped earning.

An easy success secret to an early and comfortable retirement is to tap passive income sources. A simple source is ‘rent’.  If you invest in a property during your working years and then rent it out, you can easily enjoy its monetary benefits later on in life. 

 11. They earn money from various sources  

Earn money from various sources

Those with an objective of retiring early don’t stick to a single source of income. They discover other sources of income through freelancing, pursuing a side hustle, developing a hobby etc. to support their fixed income. 

This additional income can bridge the gap between retiring early and working for the rest of our lives.

12. They aren’t materialistic 

People who choose to retire early aren’t usually materialistic given they prioritize mental peace instead of investing in luxury items.

They will be happier to spend time in their cozy homes rather than feeling lonely in a mansion. 

Therefore, they have the discipline to live frugally, spare huge segments of their pay, and quit working at an early age. 

13. Secret to Early Retirement in India : They prioritize discipline

How do people plan Early Retirement in India - prioritize discipline

Retiring early demands a monstrous degree of discipline and order. It means drafting a budget and adhering to it. It means staying away from emotional purchases and sticking strictly to the budget.

Retirement isn’t always about stopping work. It can be done to focus on something which holds more value for you instead of that 9-5 dreaded job. Above were some common characteristics of people who retire early on in their lives and then relax for the rest of the time.

If you wish to be one of these people, bring some discipline in your life and in no time, you’ll have developed a great reservoir of retirement fund. 

So what are you waiting for? Age 65? Start saving today so that you can retire tomorrow.

What is the right age to retire in India?

The average age of retirement in India is 50-60 years. However, your time of retirement is totally upto you!

How to retire early in India?

It is often assumed in India that you cannot and must not retire too early. But truth be told, if you plan systematically enough and tap resources which give you passive income, you can retire at any age you desire.

2 thoughts on “Planning Early Retirement in India

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