You’ll hear a lot of different advice regarding retirement planning these days. Depending on who you ask, you get a different answer each time. It is because retirement planning is highly individualistic. It will look different for everyone and can depend on several factors.

Investing in a retirement plan through an insurer is one way to plan your retirement. However, the best retirement plans are ones that have been customised to care for your unique expenses post-retirement.

5 Golden Rules Of Retirement Planning

Despite everyone having a different opinion of how you should be planning for retirement, there are five standard rules people usually agree on.

  • Determine Your Retirement Expenses

When planning your retirement, try visualising or writing down what you want your post-retirement life to look like. This can help you narrow down what you need to do and the expenses you need to consider. Remember to keep the inflation rate in mind when calculating your future costs.  A good retirement plan takes this into account.

For example, Tata AIA pension plans offer guaranteed returns on their retirement plans. In addition, their retirement calculator allows you to calculate the funds and savings you need during your retirement years. It will give you clarity on how much money you should save for yourself and your family.

  • Start Planning Your Retirement Early

Most experts agree that starting your retirement planning early is a good idea. It’s suggested that you should start planning from the first day you start earning. The easiest way to do this is by investing 12% of your salary, with an equal contribution from your employer, into your Provident Fund account.

The best part of an Employee Provident Fund (EPF) is that it is mandatory. It acts as a default retirement plan for most individuals. Remember, the later you start, the more you will have to save.

  • Invest Wisely

There are many ways to do this. As a general rule, you should save 10% of your income for retirement. This 10% will be from your total income at any given point.

So if your income gradually increases in the future, you should maintain that 10%. It will ensure that your retirement funds don’t fall short of your requirements. So each time you get a raise, consider allocating half of it to your savings.

  • The 4% Rule

A big challenge many retirees face is ensuring that they don’t outlive their savings. This is entirely understandable. It is due to two main factors: rising living costs and an increase in life expectancy. Enemy number one would be rising inflation rates.

The 4% rule is commonly used in retirement planning as a workaround for this issue. It states that you can withdraw 4% of your savings during your first year and adjust that percentage for inflation every following year. This method ensures you don’t run out of money for at least 30 years.

However, this rule may not work for everyone, especially if you expect your spending habits to change during or after retirement. In addition, this rule is based on asset allocation, where you invest 60% in stocks and 40% in bonds. So if you’ve chosen other investment methods, this rule may not support you for long.

  • Get A Retirement Plan That Suits Your Needs

Retirement plans from insurers often require you to invest a portion of your income into your plan of choice. The main objective behind these plans is to ensure regular income post-retirement.

Guaranteed pension plans with life cover are a popular choice with most people. These plans will provide you with a life cover and a steady income on maturity. Additionally, these plans are also eligible for tax benefits under Section 80C.


One of the best things about retirement is being able to reap the rewards of your hard work. Note that these rules aren’t set in stone. The main takeaway here is to invest wisely and choose a good retirement plan to fulfil your financial needs.