Time, money and planning for a comfortable retirement

When it comes to time and money, one can never have enough of either. There is always the nagging feeling that life would be so much better if only we had more of these precious commodities. This sentiment becomes even more pronounced as we approach retirement. While people blame their job, fate, and other factors for a lack thereof, there is more to it than meets the eye.

When we think of time and money in unison, we usually circle back to the adage ‘time is money’ and focus on the optimum utilisation of time. However, what we fail to realise is that this relationship is rooted in the principles of investment and economics, shaping our financial decisions and future. One of the most significant aspects of investing that utilises the potential of time is compounding. Compounding leverages the returns generated by a person’s investment and reinvests them to generate exponential growth over time. Therefore, the longer your money has been invested the more it gains from compounding.

Another time-related economic phenomenon one must be aware of while planning their retirement is Inflation.  A key economic phenomenon, inflation has the capacity to undermine your investments. To afford goods and services at an inflated price in the future, your earnings or savings would need to grow at a rate higher than the rate of inflation.

Investment means parking your money in financial tools that enable it to grow and multiply over a period of time. When it comes to retirement planning these tools help investors make informed decisions and cultivate in them a habit of regularly investing for their future. At a younger age, with newly achieved financial freedom it is often more tempting to avoid thinking of retirement. However, delaying this process only robs you of the opportunities offered by time.

Starting early and giving yourself the right amount of time to slowly but steadily increase your retirement savings not only helps to cover up for life’s vagaries be it medical or other financial emergencies, but it also helps navigate and sustain you through the ups and downs of a volatile market. A longer saving period, allows you to restructure your savings in the face of adversities without compromising your lifestyle today or in the future.

The correlation between time and money plays a significant role in your retirement planning, the onus of making the most of it lies on you. Once retired, proper planning does not just support your sustenance and medical needs but also allows you to enjoy a lifestyle that you wished for but didn’t have the time for in your working days. You can travel, shop or pamper your loved ones without worrying about where the next penny will come from, since your retirement planning has it all covered.