Delayed But Not Defeated Fast Track Retirement Planning When You are Starting Late

May 31, 2025

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The years have passed sooner than you realised; before you know it, retirement is nearer and much less planned for. You glance at your funds and years and start feeling anxious and insecure. Maybe your past years were devoted to educating your child, clearing a mortgage, helping relatives, or perhaps just financial planning was something that fell to the wayside amidst life's other commitments.

If that sounds like you, know you are not the only one. Many Indians end up in their late 30s, 40s or even 50s and are left to see that their retirement corpus is still nowhere near what it needs to be. The silver lining? While saving early provides major benefits thanks to the magic of compounding, beginning today is better by a zillion than delaying again. The time is now for a methodical, speedy plan to construct a safe tomorrow.

Retirement Planning: Acknowledging the Reality, Embracing the Possibility

Yes, you did miss some years of compounding. Yes, you may have to sacrifice some things. But it's not about lamenting the past; it's about making drastic decisions for the future. Consider it an intense, concerted push instead of a relaxed pace. The objective changes from making money over decades to aggressively making it in a shorter, more compressed period. Here's how to fast-track retirement planning in the Indian market:

1. Aggressively Increase Your Savings Percentage (The Non-Negotiable First Step)

This is the most powerful lever you can avail yourself of. If you were saving 10-15% of your income, you may need to bring it up to 25%, 30%, or even higher. For example, if you earn ₹1,50,000/month and save 35% (₹52,500), you’ll save over ₹6.3 lakhs/year. In 15 years, that’s ₹2.6 Cr+ (assuming 12% return).

● Strict Budgeting: Examine all spending. Find places where you can reduce spending, such as eating out, watching movies, using subscription services, and making unplanned purchases. Pay yourself first before you can spend means automate investing before you spend.

● Increase Your Earnings: Can you freelance, skill-up for a career advancement or have started a side business? Any additional rupees earned should be first directed towards your retirement savings.

2. Allocate More Assets to Growth

With a shorter time-frame, low-return fixed deposits or conventional insurance plans may not suffice. While it is foolish to ignore risk altogether, you must cautiously increase exposure to growth assets.

● Equity is the Key: Try to increase your exposure to equity mutual funds (large-cap, flexi-cap, mid-cap) or direct equities if you are capable according to your risk-tolerance. Equity has provided higher returns in the long run, which is very important to catch up.

● Review Existing Investments: Are your old policies or instruments lagging? Get a fee-only financial advisor to analyse whether it makes sense to restructure your portfolio. Redeploying capital from stuck assets into growth-oriented ones can make a big difference.

3. Reassess Your Retirement Corpus Target and Deadline

Beginning late May means revising your post-retirement financial plans a bit.

● Calculate Your Needs: Use an online retirement calculator to calculate what you will need, considering parameters such as inflation and the standard of living you want.

● Consider a Later Retirement: If possible and acceptable, working an additional 2-3 years can tremendously increase your savings. This can also lower the duration your corpus has to sustain you.

● Phased Retirement: Can you switch to part-time work or consulting rather than a full retirement? This generates more income and relieves your corpus of the pressure at first.

4. Pay Off High-Cost Debt

High-interest debt (such as credit card debt or personal loans) eats away at your savings potential. Pay these off as soon as possible. The interest you save is usually greater than the return you'd receive from investing, so it's a sure "return."

5. Do Not Neglect Your Emergency Fund

Even with the best-laid plans, life happens. Means no matter how carefully and thoughtfully you plan, unexpected events can still occur and disrupt those plans. A solid emergency fund (6-12 months of living expenses) keeps you from blowing your retirement plan by withdrawing from investments in the event of job loss, medical issues, or other unexpected occurrences.

Act Today to Stay Secure Tomorrow

This is not a fix forever. Periodic monitoring (at least once each year) of your investments, rebalancing your strategy according to the performance of the market and changes in your life, and remaining self-disciplined with your savings rate are imperative to remain on the fast track.

Finding out you are behind in retirement planning can be intimidating, but it is by no means a lost cause. For individuals facing this reality, the solution is making deliberate decisions: saving much more, investing with a bias towards growth assets such as equity, maximising tax advantages, and possibly reconsidering your retirement timeline.

It takes discipline, hard decisions, and persistent effort. But by taking charge now, getting a realistic appraisal of your situation, and following an aggressive plan, you can gain significant momentum and move toward the secure and independent retirement you deserve. Even if you start late, a methodical and aggressive strategy can help you retire with dignity. The time to act is now.

-Dayco India

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Delayed But Not Defeated Fast Track Retirement Planning When You are Starting Late

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