Having a house, the education of the children, the car, the holidays and the well-being of the parents – I am sure I have missed several things here. Yes, the list starts from here. Beyond this are the numerous other events that mark the life of the average working Indian, unless he was born with a silver spoon. We are all so engrossed in our daily lives that we forget about the inevitable tomorrow.

Our average working life is 25 to 60 years, which means 30 to 35 years of useful life. With massive medical breakthroughs and advances, the average life of an individual would be 90 years by 2025, which means that one has to do without a regular source of income for more than 30 years.

My father, who was with the government, had a comfortable retirement life backed by a decent pension. Gone are those days when the government has eliminated pension plans, most of us also work in the private sector.

Some quick eye openers:

1) Existing pension plans are good for an organized workforce that makes up about 10% of the total workforce. Approximately 90% of the workforce is deprived of this benefit, since they work in unorganized sectors.

2) Approximately 92% of the population that works in the private sector abstains from social security. Only 7-8% of them are covered by pension plans in India

This is what needs to be done.

a) Start early: The earlier you start saving, the better it will be, since the investment required would be less. A person who starts saving Rs 5,000 per month from the age of 30 will have about 75 lakes at the age of 60, if the same person starts at 40, he will only have about 30 lakes.

b) Analyze your spending patterns and cut down on unnecessary spending: If a couple can sit down and jointly discuss their spending and the areas in which they can save, they will be amazed at how much savings small sacrifices can make.

I did the same and we ended up reducing our total monthly spending by about 11,000 rupees. Start investing this saved amount, be regular and save for the long term. For example, 5000 rupees saved over 30 years becomes 75 fouls with a return of 8%.

3) Savings account: If your hard-earned money is in your savings account, then it is not a savings, it is an amount that is waiting to be wasted. Invest in a fixed deposit, mutual fund schemes, public provident fund also known as PPF or insurance, but do not keep it in your savings account.

4) Be serious and focused: Never break investments, discontinue or delay, “I’ll do it later” and this later never comes. Start investing today. Compounding is an investor’s best friend because the power of compounding turns his small amount of money into a considerably larger amount. The longer the time period, the higher the value you will get.

So the secret to a happy retirement life is out, it’s up to you to follow it and maximize your earnings.