Is your future secure

How many of you feel that your future is secure financially...and what are the ways in which you are planning it.

I think people abroad already have some amt cut at source as 401K plan etc and also the government helps...but those in India how are you going about it.

Roopa.

Hi Roopa
What is this 401k plan??? if you don't mind will you explan this..............

Aruna - a 401(k) plan is a retirement plan offered by employers in the US. I dont know about the other countries as to what an employer offers. The way this plan works is each employee can put away money (there are limitations) from his salary towards his retirement and the benefit is, you lower your taxable income by this amount. In addition, the employer contributes an amount towards your retirement as well. You can take this money out when you retire and at that time, it is taxed - the assumption is that when one retires, they are in a lower tax bracket. It is one of the best ways to save for retirement. My husband and I both have these plans with our employer and we have been putting money aside for retirement.

Roopa - this is a good discussion - hope the IL's residing in all parts of the world can share what they do.

dear roopa,

Very good thread.Through this thread we can have so many ideas from all our ils.
one of friends who is a financial consultant said, we save a minimum three times of our annual salary for the future.We have several options available.

1.Pf --This is mandatory even for trainees.Some companies offer vpf.So we can add a specific amount to this fund on monthly basis.
2.Life insurance-Previously only LIC of india enjoyed monopoly.But now so many options are available.There are two categories in this too
1.unit linked 2.normal one.
3.PPf--This is voluntary contribution which enjoys tax benefits.
We can save a specific amount everymonth so that we will not feel the pinch in feb and march.
4.National savings certificate---Lock in period is 6 years.
5.kisan vikas patra.
6.Mutual funds.-----There are so many options available in this.According to our needs we can select the best performing fund
7.STock option plan-----------Many companies offer this benefit for their employees.
This is a very good savings plan.
8. fixed deposits-----these are less popular due to the little returns.but a safe investment
9. last but not the least----------stocks.
If you really plan and invest in the best stocks at its lowest possible price , you get great returns.which will help you for your children marriage, or higher studies and also to lead to good retirement life.


These are my simple ideas.I am eagerly waiting for other ideas too.we have a saying in tamil "சிறு துளி பெரு வெள்ளம்"(small droplets make a sea).

So dear ils happy investing and save for the secured future.

Hi ,
These are suggestions based on DR book
1)First build a emergency fund depending upon the family expenses.The emergency fund should be able to get you through 3 months of your life if you don't have any other income
2)Second if pay off all debts except mortgage
If the above 2 steps are done then take a portion of your salary for investemt.Put 50% of salary in fixed deposit kind of investemnt where risk is very low and remaining 50% on risk bases investemnt like money market fund, stocks and mutual funds.

3)Start paying off your mortgage and start building wealth.

Thanks
Mangai

Hi Aruna, Shobha, Kritika n Mangai,

Thanks for peeping in. Shabha thanks for answering Aruna's question.

I came up with this thread as many of the ladies here mention that most of their finances flows to India to their in laws and they don't know about their savings or future financial security...this prompted me to start this thread.

The way we calculate/plan for our future is for eg.

Now i need 3lacs per annum for expenses next year it will be +5% inflation i.e

2008 is 3L
2009 3.15L
2010 3.31L


and so on and so forth...this will lead you to what will be your requirement at the age of retirement and then if there in no incoming how you can sustain on your savings.

Also you need to save for a rainy day...or any untoward expenses.

One good way is to invest in life policy which gives good return on maturity. There are n number of options. Others is stocks and Mutual funds. some in fixed deposits.

There should be a few various option in which you invest for the future so you are dividing the risk factor.

Government bonds are another good options.

These days education is also very expensive hence consider that too depending on the number of kids you have. Start collecting jewellery and such things for their wedding and expenses for that should also be factored.

I hope this sets everyone thinking and start planning for their future.

Roopa.

Thanks shobanag for explaning..........this sounds like provident fund we have in India. Where you can only deposit a certain amount of you salary into it for your retirement.

Originally Posted by Shobanag

Aruna - a 401(k) plan is a retirement plan offered by employers in the US. I dont know about the other countries as to what an employer offers. The way this plan works is each employee can put away money (there are limitations) from his salary towards his retirement and the benefit is, you lower your taxable income by this amount. In addition, the employer contributes an amount towards your retirement as well. You can take this money out when you retire and at that time, it is taxed - the assumption is that when one retires, they are in a lower tax bracket. It is one of the best ways to save for retirement. My husband and I both have these plans with our employer and we have been putting money aside for retirement.

Roopa - this is a good discussion - hope the IL's residing in all parts of the world can share what they do.

After reading Kamala and Roopa's post looks like i am fully prepeared for my old age............
I have PF yes in DH's name
PPF, LIC, Mutual funds, NSC, and some in FD. so not to worry about old age fully secured
Thanks to both of you to bring out this information, it will help people to think about they future.

Hi Aruna,

Great to know that you guys have planned your future well.

Yes i started this topic to be an eye opener for those who take it easy. With so much inflation these days and prices sky rocketing already many are feeling the heat and if the future is not properly planned then the whole financial statement can be in doldrums.

Roopa.