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For <keyword id="159074" type="ORGANIZATION" weightage="100" keywordseo="RETIREMENT-PLANNING">retirement planning</keyword>, determining your <keyword id="775334" type="UNKNOWN" weightage="100" keywordseo="retirement-corpus">retirement corpus</keyword> amount is only half the work done. Any plan not backed by action can fall flat. So, you need to start investing for retirement once you have figured how much you need. 
 
Here’s how you should work towards accumulating your retirement corpus: 
 
1. Start investing early 
 
Take advantage of the power of compounding to amplify your investments. If you need to save Rs 5 crores for retirement in 35 years, then you need to invest Rs 13,060 per month for 35 years (at 10% p.a.). If you delay this by another 5 years, you will need to invest Rs 21,926 per month for 30 years. And with a further 10 year delay you will need to set aside Rs 37,370 per month. Thus, you can see the benefit of starting early; the monthly burden is lessened, when you have more time in hand. Don’t wait till your late thirties or early forties to start planning for your retirement. 
 
2. Do not play too safe 
 
Higher return is usually associated with higher investment risk. Our parents saved for their retirement by investing in safe products such as fixed deposits, EPF, PPF and traditional insurance plans which may not help you beat inflation when the returns are adjusted for tax. 
 
Using the same example, when returns are 8% p.a. you need to invest Rs 21,652 per month for 35 years, whereas you invest Rs 13,060 when returns are 10% p.a. If you settle an instrument that is safer but gives you 8% instead of 10%, you need to invest one and a half times the amount. 
 
3. Investment discipline is paramount 
 
It is easy to compromise on a financial goal that is still many years away. You might feel tempted to make a down-payment for a new car from your retirement corpus, because you’ve got time for retirement. In fact retirement savings are the first to get compromised in case of a short term cash flow crisis. 
 
It is essential to maintain investment discipline, set up SIPs and auto-debit instructions for investments in mutual funds, recurring deposits etc. 
 
4. Diversify your assets 
 
Although you need to invest in equity mutual funds, it does not mean you must invest exclusively in equity investments for retirement. Do not ignore other asset classes, having a 100% equity portfolio for retirement at the age of 58 is as or even more foolish than having a 100% debt portfolio, when you’re 25. 
 
An equity heavy portfolio near retirement, when the equity markets are in the bear period can lead to a lifetime of financial misery. Diversification across asset classes is important; start with an equity heavy portfolio and shift to debt instruments as you move closer to retirement. 
 
5. Review and rebalance your portfolio 
 
Review your portfolio regularly to see how your investments are doing and use this opportunity to eliminate underperformers. If your portfolio has underperformed, you may need to increase the investment amount. A bull or a bear run can skew the asset allocation, so you must review and rebalance your retirement portfolio at regular intervals. 
 
Based on your investment horizon and risk tolerance, you must keep 60% in equities and 40% in debt. If required, sell some equity investments to invest in debt products during a bull run and vice versa during a bear phase. 
 
6. Don’t have irrational expectations 
 
Don’t fool yourself! If you have 30 years to accumulate Rs 5 crores, you need to invest Rs 21,936 per month, at 10% p.a. and only Rs 2,140 per month at 20% p.a. But to expect 20% p.a. return for 35 years is a recipe for disaster. 
 
 
7. Purchase adequate insurance 
 
You do not just need comfortable retirement for yourself but for your spouse too. Purchase adequate life cover to ensure comfortable retirement for your spouse. You should also purchase adequate health cover to avoid a dent in your retirement savings due to prolonged hospitalization or illness. 
Additionally, also set up a medical emergency fund to cover medical expenses not covered under your health insurance plan. You can also maintain an emergency corpus of funds to tide over short term cash flow crisis. 
 
8. Let your children share some responsibility 
 
Parents would do anything to keep their kids happy. However, don’t go overboard. If you don’t want to depend on your children during retirement, let them share some responsibility. For instance, if you fall short of their higher education corpus or the amount required is more than you expected, ask them to take a loan to cover the shortfall. Don’t sacrifice your retirement savings! 
 
<a href="http://blogs-images.forbes.com/rbcwealthmanagement/files/2015/11/Retirement-Risks-1200x802.jpg">Image source</a>

8 Steps to plan your investments for retirement

Mumbai, Feb 21 () More and more retail investors are parking their funds in retirement solution-oriented mutual funds, taking the category AUM to Rs 10,425.3 crore as of end January -- a 24.5 per cent growth over Rs 8,376.2 crore in April 2019.Industry body Amfi attributes this rising inflows into such schemes to the robust SIP segment, which has reached an all-time high of Rs 8,532 crore by retail investors alone, and also overall mutual fund AUMs hitting an all-time high of Rs 28.18 lakh crore in January."Within the total mutual fund AUMs, assets under management of retirement solution-oriented schemes has grown 24.46 per cent to Rs 10,425.28 crore as of end January 2020 as against Rs 8,376.19 crore as of end April 2019," says Amfi.Commenting on the numbers, Amfi chief executive N S Venkatesh said the growth is led by retail investors who are flocking to mutual funds in general and retirement-led schemes in particular as their awareness levels on the need for long-term investment rises."Steady month-on-month positive inflows during the last 10 months into retirement solutions-oriented category of schemes, is reflective of its enhanced awareness," he said.Retirement-oriented schemes are typically open-ended, with lock-in period of five years or till the retirement age, whichever is earlier.As of January end, such schemes had 25.42 lakh folios in 24 funds, compared to 24.97 lakh at the end of April 2019 in 21 such schemes. Retail investors are putting in around Rs 8,532 crore every month through SIPs and average of Rs 200 crore every month into such funds.According to him, retirement schemes are best suited to deliver long-term returns through systematic investment availing a mix of equity and debt schemes. Increasingly, retirement schemes are being preferred alongside PPF and other traditional debt-oriented avenues.Increasing longevity and the need to make large pool of financial corpus, is driving people to park their funds with market-linked mutual fund schemes, Venkatesh said.Meanwhile, the average AUM of overnight mutual fund schemes has grown five times over the past 10 months to Rs 52,524.98 crore in January from Rs 11,566.84 crore in April 2019, taking the folios of overnight funds to 46,763 from 21,363 during the reporting period. BEN BAL

Retirement funds AUM jumps 24.5 pc to Rs 10,425 cr in Apr-Jan

The just-announced <keyword id="22906567" type="General" weightage="100" keywordseo="Unified-Pension-Scheme" source="keywords">Unified Pension Scheme</keyword> for central <keyword id="19933272" type="General" weightage="20" keywordseo="government-employees" source="keywords">government employees</keyword> will be available only for those who are currently subscribers of the New Pension Scheme (NPS), including retirees. The new scheme guarantees employees 50% of their average basic pay over the last 12 months before retirement, as a pension for a minimum qualifying service of 25 years against a market returns linked payout under the NPS. According to the scheme approved by the Union Cabinet, the pension will be proportionate for a lesser service period of up to a minimum of 10 years. Also, assured pension of Rs 10,000 per month on superannuation after a minimum of 10 years of service will be provided. The scheme has been brought out to address the concerns of government employees over NPS, which came into effect from January 1, 2004. Under the <keyword id="3246232" type="General" weightage="20" keywordseo="Old-Pension-Scheme" source="Orion">old pension scheme</keyword> (OPS), effective before January 2004, employees got 50 % of their last drawn basic pay as pension. Unlike the old pension scheme, UPS is contributory in nature, wherein employees will be required to contribute 10% of their basic salary and dearness allowance while the employer's contribution (the central government) will be 18.5%. Under the NPS, the employer contribution is 14%, and the employee contribution is 10%. However, the eventual payout depends on the market returns on that corpus, mostly invested in government debt. Employees, under the OPS, were not required to make any contribution. They, however, contributed to the General Provident Fund (GPF). The accumulated amount, along with interest, was paid to the employee at the time of retirement. As the NPS was less attractive than the OPS, several non-BJP-ruled states decided to go back to the old pension scheme, which offered a DA-linked benefit. This prompted the Centre to constitute a committee in April 2023, under former Finance Secretary and now Cabinet Secretary-designate TV Somanathan to suggest improvement in the NPS architecture. Fulfilling the long pending demands of government employees ahead of assembly elections in Haryana and Jammu and Kashmir, the Union Cabinet on August 24 approved the UPS, which will provide assured pension to 23 lakh eligible central government employees. Those opting for the UPS will not be able to switch back. The UPS will put an additional burden of Rs 6,250 crore on the exchequer per year. The expenditure will vary every year according to variations in the number of employees. In addition, there will be an arrear of Rs 800 crore that has to be paid under the National Pension System (NPS) to employees retiring before March 31, 2025. If these retirees opt for UPS, they will receive arrears. "UPS is being implemented by the Central Government, benefitting 23 lakh central government employees," Information &amp; Broadcasting Minister Ashwini Vaishnaw said on X on Sunday. If states also adopt the UPS architecture, a total of over 90 lakh government employees, who are presently on NPS, would be benefitted, he added. On Sunday, Maharashtra, where assembly elections are due later in the year, became the first state to announce the adoption of the UPS for its employees. RSS-affiliate Bharatiya Mazdoor Sangh (BMS) said though the government has attempted to overcome the shortcomings of the NPS, there are still some issues compared to OPS. BMS will decide its future course of action only after a detailed study of the UPS after it is notified. All India Trade Union Congress (AITUC) said it is nothing but an extension of the existing NPS. The trade union expressed apprehensions that UPS will have a lot of aberrations once implemented. AITUC reiterated that it will continue to fight for the restoration of the non-contributory OPS. ICRA Chief Economist Aditi Nayar said assured pensions will add to the government's committed expenditure in the future while reducing the uncertainty for employees. "This will have to be built into the fiscal consolidation roadmap going ahead," Nayar added. The UPS reflects a thoughtful approach to long-term social security, addressing concerns about the adequacy and sustainability of pension benefits in a rapidly changing economic landscape, said Shardul Amarchand Mangaldas &amp; Co Partner Dorothy Thomas. "This move signals the government's commitment to providing robust support for its workforce, enhancing financial stability for millions of government employees across the country," Thomas said.

Over 23 lakh govt employees under NPS get option to choose unified pension scheme

<ul class="summary-list"><li>In 2021, almost 108,000 people migrated from California to Texas, according to Census data.</li><li>Unaffordable housing, diminishing air quality, and politics have driven some from the Golden State.</li></ul>Pengyu Cheng had become <a href="https://www.businessinsider.com/moved-from-san-francisco-to-texas-for-work-life-balance-2023-8">disillusioned with San Francisco.</a>The program manager moved to the Bay Area in 2014 after securing a position at the highly sought-after Silicon Valley tech company, Apple.Having spent seven years in the <a href="https://www.rentcafe.com/cost-of-living-calculator/us/ca/san-francisco/" target="_blank" rel="noopener">costly city</a>, Cheng couldn't ignore the profound effect its <a href="https://www.rentcafe.com/cost-of-living-calculator/us/ca/san-francisco/#:~:text=22%25%20higher-,The%20cost%20of%20living%20in%20San%20Francisco%2C%20CA%20is%2025,utilities%20are%20about%2033%25%20pricier." target="_blank" rel="noopener">high living expenses</a> were having on his finances."I knew that when my wife and I eventually expanded our family, we wouldn't be able to afford San Francisco or the Bay Area in general — even though we both earn good salaries," he told Insider.In 2021, the couple packed up their bags and headed to Texas. Cheng isn't the only Californian chasing the American dream in Texas. The path from California to Texas has emerged as a popular interstate relocation route in the US. In 2021, almost 108,000 people <a href="https://www.storagecafe.com/blog/california-to-texas-moving/" target="_blank" rel="noopener">migrated from California to Texas</a>, according to an analysis of the most recent <a href="https://www.census.gov/data/tables/time-series/demo/geographic-mobility/state-to-state-migration.html" target="_blank" rel="noopener">Census data</a>.In July, the median home sale price in Texas was $356,200 compared to $783,300 in California, according to Redfin. Texas' cost of living is 8% below the national average, while California's is 42% higher, according to RentCafe.<div type="image" title="Texas flag" height="1333" width="1777" msid="103732430" hostid="261" sizebytes="44966"></div>While affordability is top of mind for many Californians relocating to Texas, there are other factors drawing them to the state. Three Californians who have moved to Texas in recent years told Insider about the positives of the move and the negatives they left behind.<h2>The Chengs found a better work-life balance</h2>Pengyu Cheng's desire to leave California peaked during 2020. At the time, he and his wife were living in a two-bedroom, two-bathroom apartment in San Francisco, burdened with a $3,100 monthly rent.As COVID-19 shut down the city, Cheng felt as if he and his wife's hard-earned money was being squandered."We couldn't go anywhere," he said. "We felt like we were paying a lot of money to live in a city we weren't enjoying."The Chengs knew it was time to move. They wanted to relocate to an affordable city with amenities like parks, hiking trails, and easy access to grocery stores and restaurants. <div type="image" title="Pengyu Cheng and his family." height="705" width="938" msid="103732431" hostid="261" sizebytes="39204"></div>They chose Austin. The couple had visited the city a few times, and it came highly recommended by their friends. In 2021, they went from being squeezed inside a small apartment in San Francisco to living in a five-bedroom, three-and-a-half bathroom home in the suburbs of Austin that they purchased for $825,000. "We didn't really consider buying a home in San Francisco because every time we looked at Redfin or read an article about median housing prices, it was the same story: The real estate market was just getting more expensive," Cheng said.In addition to the perk of becoming homeowners, the Chengs have found a more balanced and community-oriented lifestyle in Austin. "In the Bay Area, most of the conversations you hear are related to entrepreneurship or moving up in a company," Cheng said. "While living in Austin, it has been refreshing to hear stories about weekend soccer practice for the kids or community gatherings and concerts." <h2>Jackie Burse feels more at ease expressing her opinions in Texas</h2>In 2021, native Californian Jackie Burse, 58, left Orange County for San Antonio, Texas. In California, Burse was renting a one-bedroom apartment for about $1,900 a month. In San Antonio, she now rents a three-bedroom, two-bathroom house for $1,600 a month.The divorced mother of two told Insider that affordability played a major role in her decision, as well the state's political atmosphere. <div type="image" title="Jackie Burse grabbing a drink." height="802" width="1070" msid="103732432" hostid="261" sizebytes="145410"></div>"I chose the area because it's more affordable to live here as a single woman," Burse told Insider. "I also love that Texans still have pride in their state and that there is room for people to believe what they want without being shamed."Burse said she felt the opposite in California. "I'm a conservative and I feel like it's difficult to have any opinions in California other than liberal, especially when you're living in the cities," she said. "I've definitely been blasted on social media for my opinions. It makes you feel intimidated and like you're living in a hostile environment."While living in California, Burse had become increasingly concerned about <a href="https://www.latimes.com/california/story/2023-09-06/judge-blocks-chino-valley-schools-policy-of-notifying-parents-about-lgbtq-students" target="_blank" rel="noopener">parental rights</a> and policy makers "<a href="https://www.latimes.com/california/story/2023-08-15/lacking-political-power-in-california-conservatives-turn-focus-to-local-school-boards" target="_blank" rel="noopener">overstepping boundaries</a>." "I believe that parents have the right to raise their children, not the state," she said. "We should have the freedom to speak our opinions or live our lives the way we want, whether we're Republican or Democrat. I think this is a value that Texans also hold dear."Burse now feels politically empowered and has no intentions of moving back to California. "For now, I don't have any plans to leave Texas any time soon," she said. "I've found a great church, made many friends, and feel safe here. I'm really happy to be living in San Antonio and would make the move all over again."<h2>The Sullivans needed a breath of fresh air</h2>In 2023, Michael Sullivan, 60, and his wife, Rosa, 61, moved from Madera, California, to Kingsville, Texas.Though the couple had spent the majority of their lives in California, they came to the realization that living in the state was no longer financially viable. What's more, they felt suffocated beyond the lack of affordability. "As the population has grown, the air quality has gotten worse in Madera," Sullivan told Insider of the central California city, a 25-minute drive northwest of Fresno. "It just became intolerable for my wife."<div type="image" title="Michael Sullivan and his wife Rosa." height="953" width="1271" msid="103732434" hostid="261" sizebytes="88286"></div>Before moving 1,409 miles across the country, the Sullivans had considered relocating to other cities in California. However, with Michael on disability and the pair quickly approaching retirement, the cost of living within the state made it out of the question."We would love to stay in cleaner-air places in California, but we are so close to retirement and my previous divorce had such a big financial impact that we couldn't afford to," he said. The Sullivans honed in on Kingsville, a <a href="https://www.google.com/search?q=about+kingsville&amp;oq=about+kingsville+&amp;aqs=chrome..69i57j0i22i30l6.2560j0j9&amp;sourceid=chrome&amp;ie=UTF-8" target="_blank" rel="noopener">small town</a> of about 30,000 people located 45 minutes south of Corpus Christi. Rosa's son had already put down roots there, and she found its air quality to be better."Earlier this year, Rosa's son and his wife had a baby," Sullivan said. "My wife went to visit them for a month and her lung problems cleared up completely."In September, the Sullivans purchased a 2,500-square-foot, three-bedroom house that is situated on one-third of an acre. They paid just under $300,000 for the property. Back in Madera, the couple lived on an acre of land that Rosa's parents purchased in 1963 for about $5,000. While they live in Texas they will continue to rent out the property. Sullivan said if they were to sell it, it would be worth about $250,000 today<a href="https://www.niche.com/places-to-live/madera-madera-ca/" target="_blank" rel="noopener"></a>. "I'm not really sad about leaving California," Sullivan said. "You gotta do what you gotta do to take care of yourself and your family."

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8 Steps to plan your investments for retirement

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Retirement funds AUM jumps 24.5 pc to Rs 10,425 cr in Apr-Jan

PTI

Over 23 lakh govt employees under NPS get option to choose unified pension scheme

PTI

3 former Californians share why they decided to chase the American dream in Texas

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