According to CNN Money’s Ultimate Guide to Retirement, “Ideally, you’d start saving in your 20s, when you first leave school and begin earning paychecks. That’s because the sooner you begin saving, the more time your money has to grow. Each year’s gains can generate their own gains the next year – a powerful wealth-building phenomenon known as compounding.”
How many times have we heard our parents urge us to inculcate a habit of saving and to do so early in life? And how many times have thought that we are still young, why not enjoy life while we can? But why can’t both happen together? Building a good nest egg for the future should not have to mean sacrificing present pleasures. What you need to do is save smart and start early to gain from the phenomenon of compounding. There are myriad savings plans that can help you do just that, securing not just your future but also that of your family.
Inculcating the Saving Habit
Saving smart means not just knowing when and how much to save and starting early with it, but also knowing what your savings can earn for you. Different savings plans will offer you varied advantages, you need to research your options well before making the right choice for your needs and preferences. Here’s a look at some of the options that you can make the most of, especially when you start early:
- Some life insurance plans offer you a guaranteed, regular source of income. So, what you get is not only assured death benefits for the family you leave behind on your demise but also added income while you are still alive to enjoy it.
- Another type of savings plan is one that offers you guaranteed cash backs after regular intervals, for instance, every five years. If you can then roll over this cash back into further savings, imagine the corpus you can build by the time you retire.
- If you don’t want to have to keep track of what is happening to your savings on a regular basis, you could opt for a plan that offers maturity benefits, apart from a good sum assured amount. You can consider investing these maturity benefits further when the plan expires.
- Then there are life insurance policies that allow you to make a lumpsum investment and then not have to bother with regular premium payments. This gives you peace of mind of having insurance without having to worry about making regular payments. Convenient and simple, isn’t it?
- You could also consider unit linked plans that not only give you flexibility to choose what you would like to invest in but also offer good returns.
While the list of savings plans doesn’t end here, the key is to gather as much information as possible and start early to get maximum returns on your investments. The habit of saving might be just what you need for a fulfilling life.