{"id":186,"date":"2020-01-21T12:28:08","date_gmt":"2020-01-21T12:28:08","guid":{"rendered":"https:\/\/www.invest19.com\/blog\/?p=186"},"modified":"2020-01-21T12:28:10","modified_gmt":"2020-01-21T12:28:10","slug":"why-should-you-consider-owning-stocks-as-a-retirement-savings-plan","status":"publish","type":"post","link":"https:\/\/www.invest19.com\/blog\/why-should-you-consider-owning-stocks-as-a-retirement-savings-plan\/","title":{"rendered":"Why should you consider owning Stocks as a Retirement Savings Plan?"},"content":{"rendered":"
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The word retirement evokes plentiful emotions. It\u2019s the\nphase of life when you look back at the bygone time with a myriad of thoughts\nand plan ahead for the upcoming post-retirement phase. One such thought that\ncomes across the mind during this time is the retirement fund. <\/p>\n\n\n\n

 The thing about\nretirement is that during this phase you need funds to lead a life that you\nenvision for. You cannot go on to work for the entire life as there comes a\ntime when you have to bid adieu to the job. It\u2019s during these times that you\nabsolutely need funds. But how will this happen? The answer is a retirement savings\nplan. <\/p>\n\n\n\n

The need for\nRetirement Saving Plan<\/strong><\/h3>\n\n\n\n

With age, the ability for a person to manoeuvre into work the way they do during youth age is minimal. It\u2019s the plain old truth. During this phase, people look to rest along and enjoy life. And this part of the act requires funds. Merely hoarding the cash into a savings account or some other instrument will not provide you with the best retirement option. That\u2019s where the retirement saving plan comes in. The major goal behind a retirement saving plan is to generate regular income without having the need to work for it. A good properly worked out retirement saving plan will help you live your post-retirement phase with well and good. Let\u2019s check out if stocks can be a good retirement saving plan. <\/p>\n\n\n\n

Why own Stocks as a Retirement Plan?<\/strong><\/h2>\n\n\n\n

Simply put, India still hasn\u2019t warmed up fully to the\nconcept of the stock market investment. They still have reservations around and\nstay put from investing in the stock market due to fear and myths. It\u2019s a\nreason why traditional investment means have been so much in usage. Also,\nanother factor to think about is the risk tolerance level and the\naggressiveness towards investing. <\/p>\n\n\n\n

When we have age on our hands we tend to have a certain job or go through business and have the audacity to maintain an aggressive attitude towards investment. We have a high-risk tolerance level and can certainly take on more risky ventures. But as the age dwindles down, the aggression level tends to curb below. There are a host of reasons for it, the added responsibility on the shoulders, the need to fulfil the family needs and more. These all tend to impact our risk tolerance level and we slowly transition from having an aggressive stance to having moderate or low-risk stance.\u00a0 <\/p>\n\n\n\n

If you look on the basis of returns, then traditional investment routes like fixed deposits tend to offer only 7%-8% in return while other options like PPF and more have a similar level of return like 8%-9%. Count the inflation factor in and the return is a meagre 4%-5% which will not be enough to set up a proper retirement saving fund. Whilst if you were to see, the stock market has historically offered a better return than any other investment option around. They have offered a return of 14%-15% CAGR over the past 15 years. <\/p>\n\n\n\n

We\u2019ll discuss further with an example which will clarify it\nfurther. <\/p>\n\n\n\n

A Mathematical Scenario<\/strong><\/p>\n\n\n\n

When it comes to retirement saving fund, you are generally\nlooking for an investment of 3-4 decades.  A retirement fund is generally pretty large\nand it cannot be built in a short span of time. It\u2019s imminent that it will take\ntime. For say you intend to start investing at the age of 30 and have set your\nretirement at the age of 60. That gives you 30 years to build your retirement\ncorpus.  So how do we go about it? Let\u2019s find\nout the retirement corpus that you\u2019ll need and then seek the best investment\noptions to build that corpus. <\/p>\n\n\n\n