Wake up call for our generation(Born in eighties)

I am trying to generalize a common problem among my friends and known people of our age group and may be you can also co-relate your( or some one you know closely) situation. To narrow down one more level, the middle class fortunate ones who are not born with a silver spoon. Most of us have an engineering degree or even a MBA degree landed up our dream jobs from the campus. Life has become so predictable including our daily routine and weekend activities.

Probably our monthly salary is equivalent of our parent's yearly salary or even few multiples. Earning so much in so less time and at such early ages made us confident of our capability. The same reflects in our spending pattern. The average age of owning a house is now close to 30 which is almost halved in last few years. The latest LED TV or smart phone is well within our reach, thanks to the credit cards and zero interest EMI options. We all have a (potential) surplus monthly income with few options to utilize them. So we have become the easy targets for numerous financial product sales force or the real estate marketing cartel.

Having said that, among so many other blunders, the single most common mistake I see is : Inadequate financial planning for retirement. Our previous generation were mostly government employees or the corporations with provision for pension, as it used to be one of the criteria for a preferred employer. Unfortunately now, all our employers, mostly private or MNCs don't provide that facility(pension). So I feel the first and foremost thing we should think about is retirement planning to maintain the same standard of life as we have now after we retire from the job. The way inflation is hitting the most basic needs for survival like food, residence (house rent) healthcare and education (children)etc. a haphazard planning can lead into a major financial trauma in the future.

But there is no need to panic now, as age is on our side and things can be sorted out with smart planning. The bottom line should be to beat the inflation adequately to protect your saving as well as multiplying your capital with the power of compounding(considered as 8th wonder - do your bit of homework If you are not aware ).

Answer the below questions(Yes/No) to know If you should be worried for your retirement plan:

1. Have you ever thought or planed for your retirement?
2. Do you know at what age or after how many years you want to retire from full time job?
3. Do you know your monthly requirement after retirement?
4. Do you know the amount you can expect (monthly or lump-sum) from your retirement plans you have invested in?
5. Do you know the rate of annualized return on your investment for retirement?
6. Do you have sufficient(at least 10 times of your annual income)  insurance cover?
7. Do you own a house where you can stay after retirement?
8. Do you have any passive income source?

If most of the answers are 'Yes' then you need not worry else plan to make them 'Yes'.


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