Here’s How You Can Retire Rich in India

6 min read • Published 7 November 2022
Written by Krishna Deshmukh
Keep reading to learn how to retire rich

Retirement should be a time when you do not have to worry about financial obligations and enjoy yourself with the wealth you have accumulated over the years. Although, have you ever wondered how is it that some people retire rich and others do not? Is it because they were born rich or they had a good income? The answer might be their smart retirement plan. 

Financial planning is of utmost importance when it comes to having a wealthy retirement. If you wish to fulfil your goal of travelling abroad, starting a venture or adopting a new hobby.

Here is a guide on how to retire wealthy.

Step 1: Start as Early as Possible

People often tend to make the mistake of not thinking about their retirement till it’s very late and they are nearing their retirement. The phrase ‘time is money’ is absolutely apt regarding financial planning, especially when it comes to retirement budgeting. 

  • If you start planning and saving in your late thirties or early forties, you get less time to save for your future. Starting early will give you several years to leverage the power of compounding in your favour. 
  • The second benefit of investing early for retirement is that you can ride out the risks of market fluctuations related to equity investments. You can change your course and try something different if your investments do not fetch good results. 

A good blend of diversified investments in mutual funds, fixed income instruments, pension plans and insurance policies will secure your golden years.

Also Read: A Simple Guide to Making Your Retirement Budget

Step 2: Know Your Goals and Prepare Your Budget

You might have a huge list of things you would like to spend on and pay for post-retirement. A smart approach before preparing your budget would be to decide what the necessities are and what luxuries are. For example, medical expenses, children’s educations, and loan payments might be some of your unavoidable expenses. Your travel bucket list or building a fancy holiday home might fall under luxuries. You need to calculate the estimated amount of money you will require and regard that figure as part of your retirement planning.

  • In order to come up with more realistic figures, you must also consider the inflation rate. This will give you a clearer idea of the investment options you can opt for.
  • After getting a clear idea of your goals, you need to develop a monthly and yearly budget. This budget must be made keeping in mind your monthly income and fixed expenses like house rent, medical/health, household and variable expenses like entertainment and travel. You must also note down the savings that you make every month. 

This will help you get a better insight into your current financial health. You should ensure that you prepare a retirement budget and stick to it to utilise your income in the best way possible.

Step 3: Plan Your Finances and Start Investing

If you want to see your money grow, you should plan your investments properly. You should divide your financial goals into short-term, mid-term and retirement goals. 

You might put a portion of your income in a savings account for your immediate requirements. To fulfil mid-term requirements, you can choose investment options like debt and equity mutual funds, bonds and gold ETFs

Once you’ve ensured financial security for the near future, you can look at long-term investment options to build a retirement corpus. Some of the government-backed investment options include public provident fund, national pension scheme, employee provident fund scheme and voluntary provident fund. 

Investing in pension plans might be a great way to earn interest in the form of a pension by investing a small amount of your income regularly. You can also consider investing in equity and equity-related investments if you have a long-term horizon.

Also Read: Step-By-Step Guide to Efficient Retirement Planning

Step 4: Avoid Debt

An ideal post-retirement financial plan should begin with easing off debts even before retiring. Make sure you pay off your loans and all unpaid dues to lower the burden during your retirement life. Excess debts and loans can deplete your savings and deepen your liabilities. 

It is not ideal to have a large loan payment hanging over your head every month or year after your retirement. Emotional peace of mind comes when you pay off the loans. It offers you satisfaction, releases you from your financial burdens, and lets you retire rich and happy.

Step 5: Stick to your retirement plan

It takes a long time and discipline to accomplish your longest financial goal, i.e., financially stress-free retirement. However, many people tend to lose focus in the middle of the journey and divert their retirement earnings. Remember that your retirement savings are the major source that you can fall back upon. Account for short-term emergency situations when you start planning for your retirement, so you don’t have to divert funds from your retirement plan.

Step 6: Purchase Insurance Policies

Availing life insurance plans are necessary to protect yourself and your family from unforeseen circumstances. 

As life can surprise you at any moment, getting a term plan can safeguard your family from a financial crisis. 

Additionally, most health insurance plans come with rider options that will offer coverage if you are diagnosed with a critical illness or suffer from an accident. You should opt for adequate health insurance coverage so that you do not exhaust your savings. Some health policies also pay for pre-hospitalisation, post-hospitalisation and diagnostic tests as well. 

Also Read: 6 Pension Schemes for Senior Citizens Offered in India

Final Words

If you follow the guidelines mentioned above, you can move on the path of making your future secure and retire rich. The most important step that you can take before your retirement is to plan from an early stage so that you understand your goals and come up with a plan of action accordingly. 


What are annuities?

An annuity plan is a contract between you and an insurance company which will offer you post-retirement, a fixed amount of money periodically for the rest of your life or for a certain period. Such plans provide you with a regular and stable post-retirement income after depositing a lump sum amount or paying a series of premiums to the insurance company.

What are pension plans?

Retirement or pension plans are annuity plans that help you meet your medical and living expenses after retirement. These plans offer dual benefits of insurance policy and investment scheme. 
You can invest in these plans by paying a lump sum amount or making regular payments. Usually, pension plans also offer the flexibility to choose the underlying assets for investment.  

What is a good retirement income? 

Most financial experts suggest that your annual retirement income should be 70%-80% of your pre-retirement annual earnings. For example, if your pre-retirement income is Rs. 10 lakh, your ideal retirement income would be Rs. 7-8 lakh per year. This amount will help you maintain your current lifestyle and expenses post-retirement. 

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Krishna Deshmukh

Investment Principal
Krishna is an investment professional with a demonstrated history of working in Debt Capital Markets. He has completed his B.E. (Hons) in Computer Science Engineering from BITS Pilani and MBA (Finance) from JBIMS, Mumbai. He is currently working as Investments Principal at Wint Wealth. Previously he worked at Kotak Mahindra Bank at their DCM desk and Northern Arc Capital at their Structured Finance desk.

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