Smart planning can help save for retirement even if you started late

CHENNAI: When it comes to retirement planning, the earlier you start the better it is. However, one mistake people make is to defer savings for retirement till it is very late. Experts say, even after starting late one can catch up with some smart planning. 

By starting early saving, you can create a large retirement corpus by investing even small amounts. But if you are late on saving then first acknowledge the problem and assess your financial situation objectively. One must also seek help of financial experts to get best advices which will help in better savings.

If you are a salaried individual, experts say the first thing that you can bet on for your retirement savings 
is your EPF (Employees’ Provident Fund) account. However, a Voluntary Provident Fund 
or VPF is definitely something that one needs to focus on. One can always increase savings in 
the VPF by voluntarily contributing a larger share.

Experts advise that if one has capability for high risk tolerance, then he/she should start investing regularly in equity funds as well. In this scenario, your portfolio will have a combination of debt (EPF, VPF, PPF) and equity instruments (equity funds). If you are just starting out, it is strongly advised to have a major chunk of your regular investments going towards equity funds.

This allocation will help you earn higher returns for long durations of time and can gain from compounding interests. According to Chennai-based financial advisor S Vijayan, the golden rule for saving is to start early but if anyone is late then the person should focus on saving as much as possible from earnings. Since you have already lost a lot of time you need to make up to some extent by investing more in the remaining years.