Planning a dream retirement is of utmost importance for young investors who have just started investing in the financial markets.
The biggest benefit of planning retirement early is compounding interest. Put simply, the earlier you start saving for retirement, the more money you will end up with, to an exponential degree, and the less capital you will need to put into your savings.
In an interview with CNBC-TV18's Sonia Shenoy, Mrin Agarwal, Founder & Director of Finsafe India, said inflation and retirement age are some of the important factors while planning one's retirement.
"There are many factors which influence the retirement corpus but the first and one of the important factors is inflation. Taking the right inflation number into account is very important, so that you can assess the right retirement corpus. The second factor is retirement age. There is a big difference in the amount that you need to start investing for the retirement corpus based on the retirement age. The earlier you plan to retire, the higher will be the investment amount that is required."
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She said, the earlier one starts investing, the lesser will be the investment amount and the easier it would be for you to build that retirement corpus.
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"A 25-year-old, investing Rs 5,000 per month for the next 35 years, can build a retirement corpus of almost Rs 2 crore, whereas somebody who starts at the age of 45 years and invests Rs 20,000 per month for the next 15 years will have a retirement corpus of only Rs 80-85 lakh. So, there is a huge difference if you start investing early", she said.
Watch video for entire discussion.