Why Starting Early Is Your Biggest Financial Advantage

Retirement may feel decades away when you’re in your 20s or early 30s. Career growth, travel, lifestyle upgrades, EMIs — these often take priority. However, the biggest financial advantage Millennials and Gen Z have today is time.

Why Retirement Planning Cannot Wait

With rising life expectancy in India, many individuals may spend 25–30 years in retirement. At the same time:

• Inflation steadily increases living costs
• Medical expenses are rising
• Traditional pension structures are limited
• Nuclear families reduce dependency support

This makes self-funded retirement planning essential.

The Power of Starting Early

The earlier you begin investing, the more you benefit from compounding — where your returns generate further returns over time.

For example, someone who starts investing at 25 may need to invest significantly less per month compared to someone starting at 40 to achieve a similar retirement corpus. Time reduces the pressure on contribution size.

How Much Corpus Is Enough?

There is no universal number. It depends on:

• Your current lifestyle
• Expected retirement age
• Inflation assumptions
• Healthcare costs
• Other income sources

A structured financial plan helps estimate the corpus required based on realistic assumptions.

Common Mistakes Young Investors Make

• Delaying retirement planning
• Relying only on EPF or employer benefits
• Ignoring asset allocation
• Investing without goal clarity
• Chasing short-term returns

Where Can Millennials & Gen Z Invest?

Depending on risk appetite and financial goals, options may include:

• Equity mutual funds (through SIP)
• Tax-free guaranteed pension plans
• Pension plans with deferred annuities
• Hybrid or balanced investment funds

Asset allocation should align with long-term objectives and risk tolerance.

Final Thought

Retirement planning is not about sacrificing today — it is about protecting tomorrow. The earlier you start, the greater flexibility you create for your future self.

A disciplined, goal-based approach can help you move towards financial independence in a structured and responsible manner.

Author: Bahaar Anerao, Certified Financial Planner (CFP®)
This article is for educational purposes only and does not constitute investment advice. Investments in the securities market are subject to market risks. Read all scheme-related documents carefully before investing.