Many people want to enjoy a peaceful life after they stop working, but very few start planning for it early. Even when they know saving for retirement is important, something seems to get in the way. This is where behavioural nudges, such as small suggestions or reminders, can help.
Let’s first understand why people delay retirement planning and how simple changes can help.
What stops people from saving for retirement
Saving for retirement sounds important, but in real life, people often push it aside. There are many reasons for this:
- Thinking retirement is far away: When people are young, retirement feels like something that will happen much later. They focus on more immediate needs like rent or bills.
- Not knowing how to start: Many are confused about how to save for retirement. They may not understand how much money they’ll need or which are the best retirement investment options.
- Overconfidence in future income: People assume they will earn more in the future and will start saving then. Unfortunately, many fail to realise how fast time flies.
- Too many choices: Retirement planning in India offers many investment options, but this can sometimes make people feel overwhelmed, leading to no action at all.
- Lack of reminders: Daily life is busy. Without small reminders, it’s easy to forget to plan or invest.
Read Also: Retirement Savings Rule for 2025: You Must Know
How automation and reminders improve retirement saving
The good news is that simple tools and gentle nudges can help people overcome these problems.
- Auto-debits and salary deductions: An easy way to start saving for retirement early is to set up automatic transfers. Money goes directly into a retirement fund as soon as your salary is credited, without you having to think about it each month.
- Digital reminders: Apps or SMS reminders can prompt you to check your savings, top up your investments or review your retirement plan. These small nudges help keep retirement goals on your mind.
- Default investment choices: Some retirement plans automatically choose a basic investment option for you. This eliminates the stress of decision-making and helps people get started.
- Visual tools: Seeing a chart of how your money can grow over time with early saving can be very powerful. These visual tools illustrate how small steps today can potentially build a big future.
- Saving challenges: Some people respond well to friendly challenges. For example, apps or banks may encourage you to save a bit more each month. These friendly nudges can make a big difference over time.
How to plan today, not later
The gold standard of investment advice is to start saving for retirement early, even if the amount is small. But beyond just starting early, it’s important to plan well. You can do that by:
- Setting a goal: Think about how much you might need when you retire. This includes daily expenses, healthcare, and maybe travel or hobbies. Having a goal gives you something tangible to save for.
- Knowing your options: Learn about the best retirement investment options available to you. This might include provident funds, pension schemes, mutual funds or insurance plans. Each type can have its own benefits, depending on your needs.
- Reviewing your plan regularly: Review your plan in accordance with life and income changes. Check once or twice a year to see if your savings and investments are on track.
- Increasing savings slowly: If you get a raise, try to increase your savings too. Even a small increase can make a big difference after many years.
- Keeping it simple: You don’t need fancy tools or complicated advice to succeed. Often, the best retirement planning begins with just getting started and staying consistent.
Read Also: Retirement Planning: Benefits, and Types of Retirement Plan
Conclusion
Retirement planning doesn’t have to be scary or confusing. With small behavioural nudges like reminders, automation, and simple choices, anyone can build a strong plan. The most important thing is to take that first step. If you’ve ever wondered how to save for retirement, now you know it starts with one small nudge!
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
This document should not be treated as endorsement of the views/opinions or as investment advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document is for information purpose only and should not be construed as a promise on minimum returns or safeguard of capital. This document alone is not sufficient and should not be used for the development or implementation of an investment strategy. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision. Investors are advised to consult their own investment advisor before making any investment decision in light of their risk appetite, investment goals and horizon. This information is subject to change without any prior notice.
The content herein has been prepared on the basis of publicly available information believed to be reliable. However, Bajaj Finserv Asset Management Ltd. does not guarantee the accuracy of such information, assure its completeness or warrant such information will not be changed.The tax information (if any) in this article is based on current laws and is subject to change. Please consult a tax professional or refer to the latest regulations for up-to-date information.
Home
Contact Us
Login
Downloads
Schemes