Financial Planretirement plan

What does it mean to plan your retirement?

There comes a time in life when you retire from your job. It may be 10 years, 20 years or even 30 years from now. And when that day arrives, you need to be prepared. It is crucial because your income stops but your expenses continue to be the same. In fact, they may even increase. Retirement planning is the process of being prepared for a life when you no longer have a steady source of  income.

Financial and non financial aspects

The first step of retirement planning is to identify your income goals for retirement and how you plan to achieve those goals. In addition, you also need to think of other non-financial aspects. You need to ask yourself questions like:

  1. Where would I live after retirement?
  2. How would I occupy my time during retirement?
  3. What are my travel plans?
  4. What are my lifestyle choices? Do I continue as before or should I make any cutbacks?
  5. Should I look for an alternative source of income?

Asking these questions can help you gain a clearer picture of how your life after retirement will be.

Different stages of retirement planning

Most people think that retirement planning is something you do when you are close to retirement. In fact, planning for retirement should start the day you begin working. And as you grow older, you need to make changes in the plan to accommodate new developments in your life.

Here are the five important stages of retirement planning.

  • Age 20-30

It is very important to stop saving for retirement from an early stage. At the beginning your savings may not be very high. However, every rupee you save towards your retirement can help you create a large corpus by the end. This is possible through the power of compounding.

At this stage, you may want to spend your money on other interests but it is important to prioritise your savings over entertainment.

  • Age 30-40

If you plan to retire by the age of 60, it means that you have a good 30 years to create a large corpus. This can be possible by investing in equities. This way, you have the potential to earn very high returns compared to other investment avenues. And while it may sound a bit risky, the long time period can help you digest any downfalls that may occur over the time period. Identify good stocks or mutual funds and invest for the long term.

  • Age 40-50

As you enter your 40s, you are probably doing well in your job. Promotions and salary hikes mean that you can invest a larger amount of money in equities. This can help you reach your financial goals much faster. Also, it might be a good idea to take a good look at your portfolio. Identify the investments that are not performing as per your expectations and rebalance accordingly.

  • Ages 50-60

As you near your retirement, it may be time to take a step back from equities. Investing in equities can help you earn high returns but at such a late stage, you don’t want to risk losing all your hard earned money. A good idea is to strategically transfer portions of your investments to safer avenues such as debt options. This way, you can safeguard your finances.

  • Over 60

Once you retire, you can continue to earn money by taking up part time jobs (that is if you wish to do so). Otherwise, you can simply enjoy life the way you have planned for the past thirty years. However, don’t forget to review your investments periodically. Transfer your funds to safer avenues that offer a regular income. Keep an eye on your taxes and assess how well your finances are working for you.


Planning for retirement is not simply a one-off activity. It is a lifelong journey and the sooner you start planning, the better will be your retirement.

Vikas Agarwal
the authorVikas Agarwal
Vikas Agarwal is an IIT-Varanasi graduate in Chemical Engineering. He is the Founder and CEO of - an investment advisory website. He is a Business Development Professional but a Value Investor at heart. He writes articles on Finaacle, which focus on simplifying the art of investing and the causes of human misjudgment when it comes to investing. He also shares his experiences as an investor and lessons from some of the greatest investors of all time.

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