Planning for Retirement
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Planning for retirement is the process of setting goals and taking actions for when we stop working. It is not just something that will just happen in a month or a week. It is a process which requires constant effort to save and invest and may take years before any material amount is saved.
The first step to planning for retirement is saving money in a disciplined manner. For this purpose, you need to take a look at your expenditures. Start recording the monthly expenses. Take out figures in percentages for every category like clothes, food, maintenance, fuel, rent, etc. For example, if you spend 10% on clothes, then note that cause you’ll probably want to spend the same ratio later on too. Make two columns and list down what is important and what is not.
Now that you have a list of where your money goes, it’s time to take action. Make a list of how much you already have saved for retirement/old age/emergency purposes. Take out records of the assets you own, and other areas where you have already invested your money. This will give you an idea of how much more you need to work on and so you can work accordingly.
After recording all your financial details you can choose a retirement program to help you plan. These are offered by many banks and insurance companies in Pakistan. A good example is the Islamic Voluntary Pension Scheme provided by Al Meezan bank. They ask you to select a retirement age so that your savings are planned accordingly. The scheme is very flexible and has a tax-efficient structure. Another tool that provides help in planning is the Retirement Savings Calculator. The calculator helps you to find out how much your monthly savings will be worth in the future. You can view it now on https://www.ublfunds.com.pk/individual/resources-tools/investment-calculators/retirement-savings-calculator/
However, these programs and tools just play a small role in planning for retirement. The most important actions are taken by you, the planner, who needs to be determined to save.
