1 week Ago
Your 50s mark a critical phase in your financial journey. With retirement drawing closer, it becomes more important than ever to get your finances in order. You are likely at the peak of your earnings, but also nearing the end of your active income years.
What you do now can define the quality of your retired life. According to CA Ruchika Bhagat, MD, Neeraj Bhagat & Co., this is the last decade where you can make substantial financial changes before retirement and delayed planning could lead to inadequate savings, tax inefficiencies, and healthcare worries.
"With the 2025 Budget reinforcing the importance of self-reliance in retirement, individuals must make the most of available schemes, deductions, and exemptions," Bhagat said. The National Pension System (NPS) remains a highly recommended retirement tool in Budget 2025. It allows contributions with dual tax benefits—up to Rs 1.
5 lakh under Section 80C and an additional Rs 50,000 under Section 80CCD(1B). Investing in NPS not only reduces your taxable income but also builds a solid retirement corpus. Previously capped at 10 per cent of the basic salary, this limit has now been raised to 14 per cent of the basic salary w.
e.f 1st April 2025. According to Bhagat, Budget 2025 continues to offer attractive deductions, and those in 50s must make sure to avail all major ones: • Section 80C (up to Rs 1.
5 lakh) for investments like PPF, ELSS, LIC premiums. • Section 80D for health insurance premiums (up to Rs 50,000 for senior citizens). • Section 80CCD for NPS.
Taking full advantage of these can help you save significant tax and boost retirement savings. Investments in schemes like the National Savings Scheme (NSS) can offer stable, low-risk returns. While the NSS is not widely open for new investments now, interest accrued on earlier accounts may still be exempt from tax, as clarified in Budget 2025, subject to conditions.
It's wise to review and include such exempt income sources in your plan. Start building a medical emergency fund. Health expenses tend to rise in your 50s.
A robust insurance policy and a separate health contingency fund are non-negotiable. Reassess your retirement goals, kids’ education needs, and dependent care responsibilities. Shift your portfolio gradually from high-risk to stable income-generating assets.
You can’t afford to postpone planning. Start estimating how much you’ll need monthly post-retirement and work backward. Draft a will, update nominations, and ensure your family understands your financial arrangements.
Self-reliance is key. Relying on children for financial support is risky and unfair to them. Avoid speculative or volatile investments.
Prioritize safety and steady growth over aggressive returns. Your 50s are about securing the future. With the provisions in Budget 2025, tools like NPS, tax deductions, and NSS exemptions can help build a financially stress-free retirement.
Start now—because planning today ensures peace tomorrow..
