Off Topic :
1) When Does a software engineer start financial planning for retirement since the our Career span is only 15-20 years on average.
2) How much and which schemes to invest to mitigate the risk?
3) How much do we need for retirement?
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Chief
1. Normally it's good to start financially planning as soon as you start your job. So it'll help you save more since we'll be much younger with lesser responsibilities and the term insurance plans will be really cheap at younger ages.
2. Always have a ( equity: debt ) ratio. The younger you are, the more you can put in your equity part. Here equities are the mutual funds and stocks. If you are not capable of picking stocks or have less time to analyse the stocks, invest in mutual funds since in the long run (15>) you will normally get inflation beating returns. And set some goals (ex: kids marriage, education etc.) and invest separate amounts pertaining to each goal. I know it's a tedious task, but since we work in a short spanned field, it'll be helpful in the long run.
3. Everyone is different and we'll have different needs. Like someone can run their family with just 30k per month, but some might need 1L per month. So it's something which you have to decide on what's the monthly need you'll have post retirement. Do factor in inflation since let's say you need 1lakh per month if you retire today, but in the next 20 years the 1L value will be close to 3L😅.
And finally do consult a SEBI certified fee only financial planner. They will help you in planning based on your goals and needs. Since they work based on a few, they won't try to sell you products where they can take a cut out of it.
So visit this FB group, Asan Ideas for Wealth where you can gain a lot of knowledge on the basics of what we can do and how to achieve FIRE ( Financial Independent Retirement Early).
For the question in the comments section: It doesn't mean that once you achieve FIRE you'll have to stop working. It's just safeguarding for your future. You might have some ideas on what you might want to do post retirement, like work on your passion or something 😅. Really sorry for the long post!
Very Insightful information shared by our friend from PWC.
Generally we follow
Income - Expenses = Savings
Do the obverse , it will make a lot of difference.
Income - Savings = Expenses
In Due time , you'll start accumulating for your retirement, when you start doing this.Invest your savings at beginning of month before 5th. It will become a habit.
And also tell us what to do after retirement 😀 as not everyone invest and save a lot till their 50s
Why do people have such short career?
Chief
Burnout! Once you cross a certain point, you'll start to burnout and if that happens and you do not have something to keep you till the end of your life then you'll be in trouble. If this happens and if you do not happen to have a proper financial plan then you'll be forced to work and it won't help your cause. And on top of that we are easily replaceable. That's how the industry works. So always be financially ready to tackle it.