Your 20s are a phase in your life where the world is your oyster. You start engaging and experimenting with a plethora of jobs, relationships, and passions to find your place in the world with the receipt of financial independence. Who seeks retirement tips during this time, you ask? Many do not, but we think you should.
 

Your 20s are filled with youthful energy. It would be best to use this energy to build your career, essential relationships, and memories that you think would last a lifetime. It is also vital to develop good habits such as savings as it lays a foundation for your financial behavior in your later years.
 

So, how do you go about your 20s, ensuring you do not permanently damage the quality of your life in the 60s? Most importantly, maximize the utility of every rupee that you spend.
 

Let's break down how you should engage in all these different activities.
 

Budgeting

 

The best retirement tip that anyone can give you is to start saving as early as possible. But you have to approach this strategically, given that a considerable chunk of the salary earned during the early stages of your career gets expended just for day-to-day activities. Then, of course, that's followed by the peer pressure and temptation to go on regular outings during this period. Moreover, not spending money on low utility items that are not an absolute necessity opposed to savings is another way to aid your decision-making.

 

People in their 20s should try their best to save at least 10–20% of their income. You can distribute the savings corpus among different buckets; a retirement bucket is compulsory along with a bucket for significant investments such as cars and vacations. Make sure you separate the retirement bucket from the significant expenditure buckets.

 

This whole strategy ensures that you do not spend beyond your means and spend your savings on things that matter to you.

 

Investing

 

You can afford to be aggressive with your investment choices in your 20s, enabling you to allocate into better assets such as mutual funds. However, it's essential to risk-adjust your portfolio by investing in safe asset classes such as bonds, FDs, and insurance. Some asset classes like insurance also enable you to get a tax^* deduction, so keep that in mind.

 

Traveling

 

Besides the memorable experiences that traveling creates, you also get exposed to various cuisines, languages, cultures, and world views. Hence, traveling is an excellent learning experience. You can also allocate reasonable sums of money to your vacations without dipping into your retirement savings with proper budgeting.

 

How Do You Travel Responsibly?

 

You could explore connecting with locals on hosting platforms, which involves requesting people to host you in their homes; they generally do it for free and help you experience the culture through the eyes of locals. Linking up with old friends and family members worldwide is another avenue that you could explore, besides searching for the cheapest deals on hospitality platforms.

 

Commuting using the cheapest modes of transportation such as traveling with locals and taking the local bus instead of cabs are other ways to save money. You could also save a lot of money on food if you consider eating while living with locals that host you and your friends.

 

Keep a Good Credit Score

 

As skilled and disciplined as you are with your budget, sometimes you have to use debt to fund some of the objects of your desire. Maintaining a good credit score will bring down the cost of your debt drastically, ensuring that you do not spend too much money on interest.

 

Many billionaires have also talked about the dangers of having a credit card, leading to the habit of purchasing things you can't afford. Hence, another great tip is to take loans on only assets that generate apt returns than the interest paid on the funds utilized.
 

Maintain Physical and Mental Health

 

A good retirement tip is to maintain good physical and mental health so that you can enjoy the years that are a culmination of the hard work you've put in during your career.

 

Keeping yourself in physical shape is easier than ever. If you are reluctant to go to a gym, use a fitness app or the vast amount of available information on the internet to create your workout plan. You can use the same advice for nutrition as well.

 

Daily exercising is directly correlated with vast improvements in mental health due to the feel-good hormones released post a successful workout. Further, activities such as meditation and long walks can also be a great stress buster to accompany the rewards of exercise.
 

Insurance As a Part of Your Retirement Bucket

 

The salary required to retire comfortably varies from person to person depending on lifestyle, health, geographical region, family size, age at which you want to retire, etc. However, as a general rule of thumb, a salary that meets your day-to-day expenses and a decent amount of leisure activities while allowing you to save 10–20% per month is something you could consider as a yardstick.

 

The investments you make using your retirement bucket that forms a part of your savings will eventually determine the size of your investment corpus. You have many investment options to ensure that you earn an adequate return on these idle funds and beat inflation; they include equity, bonds, funds, gold, real estate, etc.

 

Conclusion

 

Lastly, patience and discipline are the best ways to ensure that you have adequate savings towards the phase of your retirement life. This is when you spend quality time with family and on newfound hobbies. I hope you consider these retirement tips through your 20s because thinking about retirement at such an early age gives you a great head start.
 

L&C/Advt/2022/Oct/2633