Withdrawal Strategy Post Retirement

Dalal Street Investment Journal|January 6-19, 2020

Withdrawal Strategy Post Retirement
For most of you, the difference between going for an international vacation or looking for a local and cheap outing in your retirement will totally depend upon how soon you start saving.

It is not the ‘timing’ that is more important while investing in any of your financial goals, but it is actually the ‘time’ that you give to the investment. Compounding, which according to the great Albert Einstein is the eighth wonder of the world, plays a major role in making your investment grow.

Therefore, if you think that you are quite young to worry about the retirement, think again and look around, you may find people who have insufficient amount for savings and are instead cutting corners to meet their ends. Therefore, undoubtedly, retirement planning should be your utmost financial goal. In India, many of you believe that your children will take care of you in your golden days. You should be clear that your children are not your retirement fund. It will be a mistake to assume that they will share your retirement burden. Hence, start saving now and let your hard-earned money work harder for you.

The importance of the retirement planning is becoming even more significant with the advancement of the medical field, which is leading to an increased average life of an individual. Hence, the earlier you know the amount you need at your retirement, the less painful transition you will experience in your golden years. It will help you in amassing enough corpuses, so that you outlive your savings instead of the other way round. More importantly, many of us are employed in a private sector, which means you do not have choice for a state-sponsored pension. This means you are on your own when you are retired and hence, it is in your hand to design an achievable path for your retirement fund.

What is the ideal amount you should withdraw after retirement?

After understanding the importance of planning for the retirement, carefully work towards creating your retirement corpus based on the various assumptions and enjoy sitting at the desired corpus at the time of your retirement.

Thankfully, now that you are sitting at the desired corpus, the next question would be as to how much you should withdraw every year from your corpus, so that you do not outlive your retirement corpus.


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January 6-19, 2020