Twenty-six-year-old Anoushka Awasthi works in an MNC. She plans to buy a small piece of land in the mountains, open a cafe and retire before she turns 50. “I am not going to slog till I am 60. It’s not fair to make our bodies go through the grill when it’s ageing. I would like to retire early and start travelling the world,” says Anoushka.
The army of youngsters who want to retire early is growing by the day, claims the latest study by the Employees’ Mental Health Organisation of India.
Gone are the days when 60 was considered to be an ideal age to retire. A majority of youngsters across the globe have warmed up to the idea of retiring early. According to the study conducted by the Employees’ Mental Health Organisation of India, more than 46% of working (employed in the service sector) Indians aged between 23 and 35 want to retire before they hit 55 years of age. Cashing on the resolution, fund companies across the nation have been trying to sell the idea of saving faster, saving bigger and retiring early.
Hence, millennials are slowly beginning to embrace the idea of saving up before they retire. It is advisable to begin financial planning when one is as young as 23. This turns out to be immensely valuable as one has time on their side to start cultivating good habits. Their road map focusses on not just saving up money but also to create wealth through various investments. Good knowledge of compounding can prove to be helpful if they are planning to invest.
Investment and saving tools such as fixed deposits, equity-linked mutual funds, PPFs and the Sukanya Samriddhi Scheme are some of the most popular ideas that have been floating in the market. Financial advisors generally advise their clients aged between 23 and 35 to not only save but invest wisely.
Anurag Lakhotia, a popular financial advisor based in Bangalore, says that more and more youngsters are ditching the idea of owning a lavish house and a fancy car by the time they retire. “The focus is slowly shifting to saving up enough for their as well as their children’s future. Thanks to the ever-mounting stress that the corporate world has to offer, millennials somehow don’t see themselves working in the same environment after they turn 50. They either want to start something of their own or they want to save up enough so that they can retire in peace,” claims Lakhotia.
Aggressive saving is another route that Indian youngsters are taking to retire early. This is why the community of FIRE (financial independence, retire early) came into existence. Youngsters who are part of this community believe in saving early and aggressively and stall a chunk of their annual income into platforms that will yield timely returns during their golden years.
Another rule of thumb is to cut down on daily expenses. Awasthi sheds light on this idea. “I chalk out a monthly budget and spend on only bare necessities. Record-keeping is also an important part of the plan. I have an app on my mobile phone that records each and every penny I spend. Card transactions get recorded automatically. I have made up my mind to give up on luxuries now to be able to enjoy them once I retire. The idea is to live a simple life and cut down on a materialistic lifestyle,” she says.
The FIRE movement that has become a rage worldwide is also preparing youngsters for a global economic slowdown that might be on the cards sooner than we had expected. Hence, at a time when jobs might be on stake and the ones on the payroll might have to take pay cuts, a money-saving movement can definitely come in handy.
The thought of taking an early retirement might have been frowned upon till the late 90s but gradually youngsters in India have discovered value in the thought and are willing to strive towards it. With a plethora of saving and investing alternatives available in the market, saving money is no longer a distant dream and retirement is definitely not a lifetime away.
For any clarifications/feedback on the topic, please contact the writer at email@example.com
I think and I know things.
And sometimes, I write!
So, if you are keen on reading,
Come with a big appetite.