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What is Retirement Planning? Steps and What to Consider

Retirement Planning is a milestone in our lives. But as freeing as it may seem, it may pose many challenges. Most people assume retirement will be comfortable, but only a small number of people plan to ensure that they get the comfort they look forward to. Thus, retirement planning is essential. 

What is Retirement Planning?

Retirement planning is the process of setting aside funds to prepare for life once your paid work ceases to offer you a remuneration. It includes personal planning to ensure that you are able to live your life as you envisioned. 

Some major parts of retirement planning include – 

  • Knowing when you want to retire and accordingly deciding when to start saving
  • Having realistic expectations about how your post-retirement life will look like
  • Learning different ways which can be used to save/invest for the future i.e. post-retirement
  • Saving a separate amount of money for emergency funds
  • Figuring out a tax strategy to ensure it does not become a burden
  • Keeping in mind inflation when creating retirement plans

Some common mistakes to avoids – 

  • Not having a retirement planning strategy that aligns with your post-retirement plans
  • Not taking into account medical expenses and other emergencies wen creating a plan 
  • Having an excess debt on retirement 
  • Not having a proper strategy for asset allocation 
  • Trading too much with realising your risk tolerance 

Benefits of Retirement Planning 

Majority of the Indian population expect their children to support them pos-retirement rather than having a proper retirement plan. While your children may support you, it may not meet your expectations. It may even backfire and cause a strain in your relationship with them.

Financial independence 

You get to decide how your life will look post-retirement and not be dependent on anyone to provide for you. If you have a proper and realistic retirement plan, keeping in mind your current income, expenses, and savings, you can have a worry-free retirement life, as per your needs.  

A steady flow of income 

A lump-sum amount is not enough on retirement. A steady income is a must to take care of regular, basic expenses. Regular cash flow ensures liquidity, safety and the confidence to lead a stable life. This requires enrollment in a low-risk savings program. 

Reduced stress

Not being sure of how much money or financial support you will be getting can be stressful. Proper retirement planning ensures that you are aware of the amount of money you will have for yourself any particular month and thus will be able to plan your expenses accordingly. Being less stressed can help you stay away from various diseases including diabetes, heart diseases, migraines etc. 

Pay only the necessary taxes

Retirement means not having a regular source of income, so taxation on retirement income and savings can be stressful and create a dent on your finances. Proper retirement planning can help you control the amount that us taxed and can help ensure better returns. 

Make better decisions in the present 

With retirement planning in place, you can make better financial decisions for yourself and your families. It can thus have a great impact on your career. If you know you are secure, you can follow your dreams, start a business and even invest in higher education. 

Plan for emergencies easily 

Retirement planning ensures that you are in a better position in case of layoffs, medical emergencies, and other emergencies. It provides you with a financial safety net. It can also enable you to choose voluntary retirement and focus on things you are actually passionate about. 

Steps Involved in Retirement Planning 

Understand the time window 

This includes being aware of your current and retirement age.  The longer the gap, the better it is. It allows you to make high-return investments. It also helps you understand how inflation will impact you and your retirement fund. 

Set retirement goals 

You need to have realistic expectations about your lifestyle pots-retirement. It is also essential to take into account emergencies and unforeseen expenses, as well as unpaid mortgages. Creating a bucket list when setting these goals can be extremely helpful. 

Start Early 

Setting aside money for retirement starts long before retirement and requires a considerable amount of planning. Any delay can mean compromising on your planned post-retirement lifestyle, or worse, being dependent on others for your financial needs. 

Reduce unnecessary expenses 

It helps to reduce unnecessary expenses and impulsive and avoidable purchases, such as those on entertainment, dining etc. in the present. This can help you achieve your retirement planning goals faster. Developing such habits in the present can also help you save up post-retirement, when avoiding such expenses are all the more crucial. 

Keep a check on your retirement planning investment

Tracking and monitoring your investments at regular intervals is crucial to ensure you stay at the top of your finances. Additionally, it is helpful to stay on top of changing market scenarios including taxes and inflation rates.

What to keep in mind while investing for retirement 

Some crucial factors to consider before beginning your retirement planning investment include- 

Risk tolerance

It is important to assess how much risk you can take before retirement planning. People with higher income can afford more risk. It also depends on your financial goals, time left for retirement, your envisioned post-retirement lifestyle etc. 


Inflation can have a major negative impact on your savings and purchasing power, which is especially an important consideration post retirement. To ensure that you are not affected by it, it is important to ensure when investing that your money grows at a rate higher that inflation. 

Balanced Portfolio 

Diversifying the ways in which you save for retirement can help you reduce risk. A well-balanced mix of high and low-risk plans are beneficial. 

Affordable investments 

When planning investments for retirement, it is important to plan as much as you can afford. It is imperative to go for solutions that work with your budget while providing good returns. It may be helpful to work with a financial for efficient retirement planning. 

Mode of payment 

Liquidity is essential when planning investments for retirement. While we are moving towards a digital economy, cash is still a major form of payment, and it is thus imperative to that into consideration. It can be needed for basic things such as groceries or even for medical expenses in case of emergencies. You should therefore make sure to look at the  fine print when investing. 

Retirement Planning for Informal Workforce 

As per the International Labor Organization, more than 90% of India’s workforce is informal, meaning that they do not receive social security benefits and thus lack security for their future. They are often underpaid and have an unstable employment. They face issues such as poor health and poverty in their later years. 

But this can be changed with the TankhaPay app. TankhaPay formalizes wages of informal workers and brings them under government social security schemes of Employee Provident 

Fund (EPF) and Employee State Insurance (ESI). 

Paying salaries to your workers with TankhaPay ensures that these workers, whether they be temporary, gig, informal or household workers, can be enrolled in these government schemes.

These schemes ensure that the workers can avail various benefits such as –

  • A monthly pension, thereby ensuring a reliable source of income, so the workers do not have to work when they are unable to
  • A lump-sum amount on retirement
  • An insurance of upto Rs. 7 lakh, in case of death of employee etc.


Retirement planning is essential to lead a comfortable lifestyle post-retirement. With The TankhaPay app, even temporary, gig, household and informal workers can achieve financial security for their retirement. 

Thus, by paying salaries through the TankhaPay app you can now become a socially responsible employer. 

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