Want happy retirement? Smart ways to turn savings into retirement income
To get financially stable to enjoy retirement life, one has to know the tricks of reinvesting savings. After all, a retirement plan involves saving and investing for the future.
In India, the majority of people are busy earning and saving to fulfil the needs of their families. Most of these savings are done in the form of fixed deposits (FDs), recurring deposits (RDs) and other traditional savings instruments that attract low interest rates when compared to equities. But is that enough for your retirement?
To get financially stable to enjoy retirement life, one has to know the tricks of reinvesting savings. After all, a retirement plan involves saving and investing for the future.
According to Sooraj Singh Gurjar, founder and MD, Get Together Finance (GTF), an individual needs to have appropriate savings that give rewarding returns for the crucial retirement days. This cannot be done only with the help of saving money in one place or getting mere annual interest on it.
Reinvest Savings
"A proper financial plan in place right from early days can give you the freedom to build a path towards a happy retirement. Learning the market to reinvest money can help in earning money," he said.
There are several ways by which a person can earn money in equities and commodities. He said that all these options have endless opportunities for every single individual out there.
Speaking about the selection of schemes or equities, Sooraj said that learning and earning can together help in building a corpus for peaceful retirement days.
Hold To Capitalize
To earn money from stocks, adopting a buy-and-hold approach is the most common strategy. This technique involves holding stocks or other assets for a long period and capitalising on returns, he said.
"Garnering adequate knowledge of how market functions and technical analysis bring incremental opportunities to earn money," he said, adding that attempting to time the market often leads to missed opportunities and lesser profits.
"Committing to a long-term investment strategy is key to maximizing gains," Sooraj said.
Reinvest Dividends
He also said that it is wise to reinvest the dividends as such earnings historically contribute substantially to long-term wealth creation.
"Put your dividends to work rather than consuming them. This will help in taking advantage of compounding effects," he said.
Diversify
Another crucial aspect of building wealth is diversification. This strategy involves spreading investments across different asset classes. This also helps in reducing the risk associated with a single stock or sector.
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