Be honest- does retirement even cross your mind right now? Between chasing deadlines, planning weekend getaways, and maybe managing rent or an EMI, thinking about what life will look like at 60 feels... unnecessary. But here’s the deal. Future you is counting on present you to be smart with money.
According to Max Life Insurance's India Retirement Index Study (IRIS), 44% of Indians believe the right age to start planning for retirement is 35. The truth is, the earlier you begin, the less you have to stress about money later. So, let’s talk about what we usually don’t, saving for retirement!
Why Think About Retirement in Your 20s?
Realistically speaking, our generation is not relying on pensions. And with rising living costs, inflation, and uncertain job markets, your golden years will only be golden if you plan ahead. Starting early gives your money more time to grow, thanks to the power of compounding (basically, your money earning money over time).
The earlier you start, the more time your money has to grow. Compound interest means you earn interest on both your initial investment and the interest that accumulates over time.
Simple math: If you invest ₹5,000 per month in a retirement fund at age 25, assuming a 12% return, you could have around ₹5.5 crore by the time you’re 60. Start at 35? That number drops to ₹1.75 crore. Now that's a big difference, right?
More Reasons to Start Now
Financial Security: Early savings will provide a cushion for unexpected expenses to ensure you a more comfortable retirement.
Flexibility: Starting young gives you room to adjust your savings plan as your financial situation evolves.
Less Stress: Knowing you have a plan in place can ease financial anxiety and let you focus on other life goals.
How to Start a Retirement Fund?
Starting doesn’t mean you have to dump lakhs into an account overnight. It’s about small, consistent steps that build long-term wealth. If your employer offers EPF, that’s a great start. If not, opening a PPF account can give you the benefit of tax-free returns. You can also consider NPS (National Pension System), a government-backed scheme that comes with tax benefits. For those looking at market-linked options, mutual funds through SIPs, especially equity mutual funds, offer higher long-term returns. If you’re open to some risk, investing in blue-chip stocks can also help build wealth over time.
Even ₹1,000 per month is a great start. As your income grows, you can increase your contributions. The key is consistency. Staying invested for the long run will help your money multiply through the power of compounding. But while you invest, it’s important to remember that your retirement fund is not meant for short-term spending. That tempting vacation or a new gadget might seem like a good reason to dip into your savings, but you've to keep telling yourself that this money is for future you. Let it grow undisturbed so that when the time comes, you have the freedom to enjoy life without stress.
As your career progresses, your financial situation will change. Maybe you’ll earn more, or your expenses will shift. That’s why it’s important to review your retirement plan every few years and make adjustments to stay on track.
The best time to start a retirement fund? Yesterday. The second-best time? Today. The longer you wait, the harder it gets to build a solid nest egg. So, even if retirement feels like a lifetime away, taking small steps now will ensure you don’t have to worry about money when you should be enjoying life.