Outlook Money
Dream of retirement may motivate a person to put adequate efforts into increasing income to build a sufficient corpus for old age. However, instead of waiting for income to grow, one must take the right steps towards achieving the target retirement corpus.
1. Start Investing Early- The longer one invests, the bigger the corpus can be created for retirement. One can start the investing process early in career as it allows more time for the magic of compounding. A longer investment period with compounding can be more efficient than a shorter one, even if the investment size is a little higher in the latter case.
Regular investments can help one stay disciplined and avoid unnecessary expenses. So, by this, one can save money continuously and invest for retirement. Regular investment helps in Rupee cost averaging and compounding, which further helps the portfolio to grow faster.
As much as how much one is investing is important, where and for how long are also important factors that determine the size of the corpus that can be created. Choosing the right investment instruments can help reduce the risk and get an attractive return to build a big corpus for retirement.
A common example of building a retirement corpus is investing at an early stage in life, here one can take higher risk, so investing in equities can help get a good return and gradually, as one grows older and gets close to retirement, one can switch to low-risk investments such as debt assets to reduce the risk and protect your corpus from losses.
Compiled by Syed Muskan