Have you ever thought about retirement in your 20s? Probably not. However, it is essential to build up a strategy that will help you have a happy and stress-free retirement. The hack is to begin now and hold on to regular saving until you retire. This way you will have enough money for your retirement days.
Aggressive retirement savings and investments in your 20s will result in a super impressive balance long before you retire. Keep an eye on your account and watch it grow and multiply. Wealth in your old age means security in any situation.
One foolproof way of investing your money for retirement is on Real Estate. Investing in a home can be a tricky business, but when it’s done right, it can be rewarding for you and your future retirement. It requires an ample amount of preparation and planning. To put thins into perspective, here are a few advantages of investing early in housing property.
Compounding
The sweetest fruit an early bird gets is that of compounding. It means that, as long as you keep re-investing and saving, you will keep gaining and will be able to build a considerate amount over time.
In case of investing in a home, it is imperative to maintain your property to attract renters at the time of retirement. The aim is to build up significant net worth on your property.
Smoothing
Timing the market is challenging, but early birds can help to smooth this out by investing early and regularly. Because you will be putting money into investments regularly, you’ll be spending at all stages of the economic cycle.
While most people fear inflation due to obvious reasons, as a rental property owner, you would look forward to it. Once you have invested in a house or a property, you do not have to worry about inflation as it will lead to an increase in your cash flow.
So, if you are looking to invest in a home for retirement, you can buy a home loan which can ease your funding for up to 80%. Before purchasing a home loan, it is suggested to calculate your EMI (Equated Monthly Installments) with the help of a home loan calculator as it makes the repayment more convenient.
EMI = Principal Amount+ interest paid on the loan
To estimate the home loan EMI, reputable financial institutions such as Axis Bank provide online home loan calculator makes loan planning easier. With the home loan EMI calculator; therefore, you can not only estimate the maximal amount of loan that you can avail, but also the EMI applicable.
Tax Benefits
You can avail a tax deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. Also, a deduction of up to Rs 2 lakh is allowed on the interest payable under Section 24B of Income Tax of India Act.
The cash flow received from your rental property is not subject to self-employment tax, but the government also offers tax benefits, including depreciation along with lower tax rates for long term profits.
Moreover, to encourage people to buy their own house, the government of India provides tax deduction on the principal loan amount as well as the interest payable on a home loan.
Invest Early in Your Happiness!
It should be your priority to calculate your monthly instalments through the housing loan calculator to compare and analyse the options available. You need to fill in the loan amount, interest rate and the tenure in the home loan calculator available online. As buying a home is a crucial financial decision, you must assess the EMI before availing the loan.
Investing is a long term game that requires patience and efforts. The sooner you begin the lesser worry for your retirement future. Choosing a decent real estate property is also a task. It would help if you kept in mind a place where people would want to move in.
Another benefit of investing in a home is you can pass it on to your heirs. Your home is where you want to be, so make sure it gives you the perfect opportunity to plan a financially secure and happy retirement.
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