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What Millennials Need To Know About Retirement Planning?

Published On Apr 30, 2021

Millennials have a career to build, a potential family to start, and even buy a house for themselves, then what is the point of worrying about 40 years from now? But, if you give yourself some thought to consider your retirement planning, it can result in a stress free retirement. The following are some of the pointers which millennials need to know about planning for retirement- 

Things Millennials Need To Know About Retirement Planning

The following are some things which millennials need to know about planning for retirement- 

1. Less Premiums, High Coverage

Early retirement planning gives you a headstart when it comes to building a savings corpus for retirement. One of the prior benefits is the less premium costs. If you start investing in retirement plans in your 20s, you will likely pay lower premiums. If one starts investing in a pension scheme in later years, the premiums are high because the insurance company mitigates the risks associated with old age.

2. Compounding Is The Way To Go 

The main reason behind the gradual growth of any kind of savings related investment is compounding. Compounding is totally determined by the time you remain invested, more than any other factor. All in all if you start investing early, your savings will be maximised by the magic of compounding. 

3. Fewer Financial Commitments

Being a young working person means you have less financial commitments in your life right now. In your 20s, you have time and resources with you to make the most of your investments. Starting a potential family, buying your first house, or building your career takes time and emerges into responsibilities that you have to face in the future. Retirement planning can add up to the financial burdens you may face in your 40s. 

4. Consider High-risk Instruments

Retirement planning requires estimating your day to day expenses, probably supporting a spouse , covering for rising inflation costs, etc. To build such a vast corpus, some risks must be taken now and then. These risks refer to market risks like investing in tools that offer high returns i.e ULIPs etc. Your age is one of the main determinants of your risk appetite. For instance, if you invest in equity related funds early in your career and stay invested for about 10-15 years, you are most likely to yield high returns because of high-risk investment,  because you had the sufficient time on your hands to remain invested in these types of plans for a longer term. 

5. Pay-off Your Debts

Debt can disrupt your savings and hold you back from growing your wealth at the pace it needs to for a comfortable retirement. If  you are in any kind of financial debt, ensure you pay it off as early as possible. A high interest is applicable to the outstanding dues that haven’t been paid in a long time. Retirement is a phase in your life when you need not be worrying about these debt payments. Hence, it is very important for you to ensure that all your debts are paid off before they create any hurdle in your retirement days.


If you are beginning to take your first steps into financial independence or planning to start a family, you must consider giving retirement planning a deep thought as it is an integral phase in an individual’s life. As a millennial, you can consider the above pointers and plan your hassle free retirement. 

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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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