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Why Retirement Planning is Necessary?

Plan your Future with Retirement Funds

All of us realize how important it is to save. And particularly, saving for retirement. The fear of ‘not having enough’ has crossed the mind of most at some point or the other. Yet many sidetrack the criticality of financial planning, often postponing retirement savings to alternate near term savings. Various surveys in the region have highlighted an alarming disparity between people’s desired retirement lifestyle and the amount they are currently saving.

When should I start saving for retirement? The answer to this is NOW. Retirement is the one, amongst your saving goals that cannot be compromised at any extent. And proper timely planning will ensure you are not required to jeopardize this goal, given any untoward circumstances.

Let’s take the case of an individual currently 33 years of age who’s been recommended a corpus of AED 2,000,000 at his planned retirement age of 55 (there’s a nil savings currently). Assuming an identified asset yielding 4% per annum, the monthly investment required to achieve this goal is AED 4428. The same case, for an individual 23 years of age, brings that monthly investment needed to be made down by nearly half to AED 2437. For an individual 43 years of age, the amount needed to set aside monthly is AED 9795. Nothing could work better in planning for a long-term goal like retirement than an early start. Besides giving you ample time to build up the required corpus, it also puts lesser of a burden on your ongoing financial health.

Get an understanding of you and your family’s current lifestyle, draw out your present assets and liabilities. With the help of a financial advisor, you could use this to estimate a retirement corpus based on an indicative retirement age and a desired lifestyle in retirement. Equipped with this knowledge, you are required to bring in a discipline in your investments. The criticality of this goal cannot be undermined. Proper financial planning is extremely critical for these goals and if not planned well you run the risk of seeing these goals mismanaged.

Another advantage of an early start is it allows you to invest in assets with a slightly higher inherent risk. For example, including more of equity centric investments within your portfolio, which could possibly provide higher returns. This may not be possible in case you are working with a shorter time horizon as the leeway to take risk narrows tremendously and the focus shifts towards capital protection.

Recognizing the criticality of this goal, we at Citibank UAE have setup Citigold, our Total Wealth Advisory offering comprehensive financial solutions and premier banking services that will always keep you in control. As a Citigold client, you are assigned a Relationship Manager who is your personal financial consultant, to help you get the most out of your Citigold Relationship. All Citigold Relationship Managers have been selected for their financial advisory and investment knowledge and their dedication. Your Relationship Manager will work with you to create a bespoke portfolio strategy, tailored to your unique circumstances. Over time, it is inevitable that both your personal circumstances and market conditions will change. This is why your Relationship Manager will conduct regular reviews of your investment portfolio to ensure that your plans remain firmly on track.

Content exclusive to Citi by Wealth Monitor. The views expressed here are those of the authors and do not necessarily represent or reflect the views of Citibank UAE. The information in this website does not constitute investment advice or an offer to invest or to provide management services and is subject to amendment without notice.