How to prepare for retirement in a world of increasing life expectancy
Subscribe to enjoy similar stories. FIRE (financial independence, retire early) has engulfed social media platforms. Individuals as young as 30 now want to retire by 40.
Retiring at 40 implies that one’s standard of living will not increase post-retirement and that their investments will suffice for all emergencies and expenses for the next 40 to 50 years. Moreover, it means forgoing the two highest-earning decades of one’s life (40-60 years), which is a financially risky decision. The primary reason for this risk is increasing life expectancy.
As life expectancy continues to rise, retirement planning implications become increasingly significant. The average Indian retires at 60. In 1990, the average life expectancy for Indians was 59 years.
By 2022, it had increased to 68 years. According to the World Economic Forum, the global average life expectancy is projected to reach 81 years by 2100. This means planning for a retirement that could span 30 years or more.
To ensure a comfortable retirement, it is imperative to invest wisely. By making informed investment decisions, one can secure their financial future and enjoy a comfortable retirement, regardless of when they choose to retire. Here's how to create and sustain retirement funds.
A well-diversified investment portfolio is crucial for mitigating risks and consistent growth. For instance, allocating 60% to equities, 30% to fixed-income products, and 10% to alternative asset classes can provide a balanced approach. Regular financial reviews are essential to adapt to market changes and personal circumstances.
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