How to Start Investing for your Retirement in 3 Easy Steps!

Financial security, not having to worry about money in old age, stop working sooner... call it what you may, but (early) retirement is a financial goal all of us have.

Achieving peace of mind when it comes to securing your financial future scores high on your list of financial priorities. Here’s how easily you can start planning for it through your own Retirement Goal on Goalwise.

Step 1: Adding a new Goal from the Goalwise Dashboard

When you sign in to your Goalwise account, you will be taken straight to your Dashboard. Here, you will see the ‘Add a goal’ button in the bottom right corner of the page, just below the notifications bar (Not signed up yet? Take a minute to do it here).

Click on ‘Add a goal’.

Retirement is the first goal on the ‘Add a new goal’ pop-up, under the ‘Essential goals’ category. We kept it there because we know it’s important for you.

Click on the ‘Retirement’ goal card, and then click on ‘Proceed to Goal Plan’.

Step 2: Personalising your Goal Plan on the Goal Plan page

One of the main inputs here is the Risk Level. Your asset allocation and fund recommendation will depend on which option you select, Low, Moderate or High.

You can also change your desired Monthly Investment amount, and your Time Horizon (your time to retirement). Your target amount will depend on these 3 inputs:

  1. Selected risk level
  2. Monthly investment
  3. Time horizon

For example, if you are 30 years old and plan to retire at 60, you can allocate a higher percentage to equity, since you have about 30 years to reach your goal. So in this case you should choose your risk level as High. If you are not comfortable with this then go with a Moderate risk level.

Additionally, let’s assume that your current monthly expenses are Rs. 35,000, your life expectancy is 85 years (But we hope you live forever!), and you wish to maintain the same lifestyle after retirement. A rule of thumb is to save in your pre-retirement years the amount of money you will spend post-retirement, based on a conservative growth rate that matches inflation. The calculation is done as follows:

Monthly Investment Needed for Retirement = Current Monthly Expenses x (No. of Years to spend after Retirement) / (No. of Years left for Retirement)

So, in this case, with monthly expenses at Rs. 35,000, no. of years to spend for after retirement at 25, and no. of years left for retirement at 30, you should aim to save around Rs. 30,000 every month. (Rs 35,000 * 25/30 = Rs 29,166)

Once you plug-in these numbers i.e. monthly investment as 30,000 and time horizon as 30 years in the goal plan you can see that this will build a retirement corpus of Rs. 8 crores by the time you are 60 years old!

You can also see the current fund selection and allocation under the Investment Breakdown table.

Once you are satisfied with the plan, click the blue ‘Add as Goal’ button at the bottom.

This creates a new goal ‘Retirement’ with the current plan and adds its Goal Card on your Dashboard.

You’re now just one step away from securing your financial future!

Step 3: Start investing through a monthly SIP

Click on the Retirement Goal Card on your Dashboard to proceed.

This is the 'Goal Information' page for your very own Retirement Goal. In addition to what you saw on the ‘Personalised Goal Plan’ page, you will also see here a projected 'Goal Path', which charts out your goal progress under different market scenarios. If you want to make any changes to your Goal Plan, you can do so by going to the 'Goal Planning Tool'. Since you just made our plan according to your requirements you are ready to go ahead and invest.

To begin investing towards your Retirement Goal, click on the blue ‘Invest Now’ button. This will take you to payments page similar to the one below.

Here Amount to Invest, Monthly Investment (SIP) option and Duration (in months) are preset as per the Goal Plan that you decided on earlier. We don't recommend changing these values here as it will affect your goal projections.

Choose the Start Date that is convenient for you out of the available options. Every month, on the date you select, money will be transferred automatically from your account directly to the Mutual Funds. Once the Mutual Funds confirm the transactions, the investment will appear under your ‘Retirement Goal’ in your Goalwise account.

Now, all you need to do is agree to the standard terms and conditions, and click 'Invest Now'! Goalwise provides bank-grade security to guarantee the safety of each transaction.

Congratulations! You’re now on your way to reaching your Retirement goal!

Now just sit back, relax and watch your savings grow. We designed Goalwise to be a ‘set and forget’ system for you. Once you have set-up a goal, Goalwise does all the hard work of managing it from start to finish. Goalwise will now:

  • Keep you invested in the best mutual funds throughout your goal, changing funds if required based on Goalwise’s rigorous research;
  • Review and rebalance your portfolio regularly to make sure your risk is always under control;
  • Notify you automatically of suggestions that can help you reach your goal faster

You have made the perfect goal plan for you, and we will work on it till you retire in style!