5 smart things to know about retirement planning

As building a nest egg has become an essential aspect of one's overall financial planning exercise today, here are some dos and don'ts for retirement planning.
1. Do the math. Compute how much you will need after retirement, taking into account living expenses, medical expenses and inflation.
2. Start now. Begin to save for retirement at an early age and allow the magic of compounding to work its wonders. To begin with, make a habit of saving at least 10% of your income for retirement.

3. As your income increases, increase your contribution towards retirement. Gradually, as a rule of thumb, you should be saving 40-50% of your income when you hit the peak of your earnings.

4. Make a household budget and a saving plan and stick to it. Establish an automatic investment plan.

5. Don't withdraw from the retirement corpus before retirement. This will hamper the compounding and amount to a serious shortfall at retirement.

(The content is courtesy Centre for Investment Education and Learning (CIEL). Contributions have been made by Girija Gadre, Arti Bhargava and Labdhi Mehta)
Source : ET wealth