Everyone wants to have a comfortable retirement, but without adequate planning it probably won't happen. People are living longer than ever before, which is obviously good news, but that means retirement is becoming more expensive.

Consider this: Only 11% of the working population in India has any form of social security for old age * (Source: Document on Pensions, Life Insurance Corporation of India, 2004).

We list for you a 5-step plan that should put you on the road to retirement planning.

Step 1: Start early, and retire peacefully
Never delay in planning for retirement. Start as early as possible. Make a list of your financial goals and what you own so you recognise the gap between the reality and your dreams.

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When you are young, your risk-taking capacity is high. Earning well, and then generating as high a rate of return as possible, is top of your agenda.

For example, start saving for retirement at age 25, so that even if you wish to retire by 60, you have an investment horizon of 35 years.

The longer the investment horizon, the longer you can save and benefit from compounding. If at the age of 25, you start investing Rs 1,000 per month at the rate of 6% compounding then the maturity amount (when you are 60 years of age) will be Rs 1,380,290; alternatively if you commence the same investment at the age of 35, then the maturity value at the age of 60 will be Rs 679,580.

With a 10 year lag, the retirement savings at 60 years is more than halved!

Step 2: Have a plan
Assess your incomes and expenditure, and make provisions for contingencies. For example, set aside some money for travel and medical expenditure post retirement. Make a list of things you own and those that you wish to own e.g. a car or house.

Try to cut down on the trivial expenditures and allocate your resources towards necessary ends like children's education and marriage that you will incur in the course of time.

Step 3: Consult a financial advisor
If you are not in a position to make a workable plan, consult a financial advisor who will help you develop one.

In developing a financial plan, your advisor should ideally present a number of alternatives to realise your objectives. Analyse these options from the retirement perspective, e.g. a limited equity exposure over a longer horizon could be vital even if you are a risk-averse individual.

Remember, your aim is to make decisions that will be most effective in helping you to realise your future financial goals, based on your current personal financial situation.

Step 4: Track and review your plan
Your financial plan needs to be monitored at regular intervals to make sure you are on target to meet your objectives. You could do this on your own or take assistance from your financial advisor.

Make sure the plan meets your investment objectives in changing market scenario. Also, understand and get comfortable with the risks, costs, and liquidity of your investments.

For instance, as you approach retirement age you should consider paring the equity exposure and moving into debt, as you would have lower risk tolerance when you move towards retirement.

Step 5: Don't dip into your retirement savings
Don't touch this pool of savings pre-retirement. If you spend money from your retirement kitty to fulfill your present needs, you will lose out big in the long run. The corpus for your retirement will be that much lower.

Planning for your retirement is not a difficult task. The challenge lies in implementing the plan with discipline.