Financial planning is crucial in retirement because it helps one identify the sources of
income and expenses and establishes your retirement budget or a cash flow based on
your personal plan. You also plan for a lifestyle you want to lead post retirement. It
becomes critical for those who work in private organisations or those who do not have any
pension unlike state / central government organisations.

There are many factors related to retirement planning, and it is never too early to begin.
You may define your retirement goals and need to start a retirement savings plan before
considering actual retirement. Follow the following four simple steps to arrive at an ideal
retirement plan.
Step 1: Decide how much income you require to live comfortably in your post-retirement
years. Remember to take into account aspects like increased medical costs, expenses and
gifts for family.
Step 2: Calculate the amount to be received in lump sum (terminal benefits) at the time of
retirement.
Step 3: Select the right retirement plan that enables you to meet your post-retirement
requirements. Preferably, choose to invest in asset classes , which can provide you with
potentially higher returns in the long run.
Step 4: Start investing very early so that you have time on your side and can enjoy the
power of compounding.