Most of us set aside a part of our salary for retirement, but this may not be enough. It is certainly a step in the right direction, but not one that will ensure absolute financial security. With rising expenses and higher health-care costs, savings alone won’t allow you to financially provide for your retirement as comfortably as you had anticipated.

Read on to Find out Why You Need More Money for Retirement than You Think

Higher Life Expectancy:

In the past two decades, life expectancy in India has increased by 10 years. According to the World Statistics Report 2016, in the 1990s, the average life expectancy in the country was 58 years.
In 2015, this number rose to 68.5 years. So, planning for retirement today in the same capacity as your parents did will no longer be sufficient for you. While better life expectancy is a good sign, it does mean that you have to finance the extra years that you will spend as a retired individual. In this case, you must finance an additional ten years and hence need more money than you had foreseen.

Forced Early Retirement:

When planning your finances, it is wise to factor in all eventualities. An effort in this direction is to also plan for early retirement, whether it is by choice or a product of circumstances. You must always have a buffer when it comes to your retirement fund.
So, if you choose to or need to retire early, years of financial planning don’t go to waste.
A simple way to begin planning for your retirement is to make good use of your provident fund. Often taken for granted, you can use this basic provision to build your retirement corpus.

For example, instead of simply using your PF amount on maturity, invest it in a non-cumulative fixed deposit. You’ll be able to multiply your funds with a fixed deposit account and receive a payout at a frequency of your choosing at the same time. Take care to pick a superlative FD (Fixed Deposit) such as the one offered by Bajaj Finance. It offers a high rate of interest, going up to 8.20% for senior citizens, along with a flexible tenor.

Rising Health Expenses:

As of 2014, according to the National Sample Survey’s Office, only 32% of urban Indians choose public hospitals over private ones. Needless to say, as an average Indian citizen, you’re spending heavily on healthcare. Besides, from 2004 to 2014, average medical expenditure when you are hospitalized has increased by 176% if you live in an urban area and over 160% if you reside in rural India.
Assuming that this is the pace at which health expenses will rise, you will need more funds to get access to quality healthcare. As a result, you must set aside more money for post-retirement medical expenditure. Not only are ailments more frequent as you age, they are also likely to cost more.

Rising Inflation:

At the start of 2017, inflation in India was 3.17%. Towards the end of the year, in November, this figure had sharply risen to 4.88%. Apart from the fact that inflation is ever increasing, it is also important to understand that often, inflation is higher than the market forecast for that month.
For example, while inflation in November clocked in at 4.88%, it was expected to be lower, at 4.2%. Since the cost of goods and services is steadily rising and your money’s value is dropping, you need to generate a lot more wealth to be able to nullify the impact of inflation and maintain your standard of living.

Post-retirement Plans:

After retiring, you may decide to focus on your health, take up a hobby or travel the world. Depending on what your plan is, you will have to account for the funds to realize your goals. For example, if your mission is to travel extensively, you will need more funds at your disposal.


To avoid shortage of funds, it is best to plan beforehand, and opt for the best investment plans that suit your needs. You can always put your money to work, and boost your income with the right investments. Use our easy FD Calculator to calculate maturity amount.

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