Well, we get to hear so many things about retirement planning nowadays. However, most of us feel that we can care less about it, as we are still way far from our retirement. Some even feel that the government will take care of all their needs, but more often than not, such an approach turns out to be a huge mistake. After all, with all the debt countries like US are accumulating, especially due to the retirement benefits burden they have to carry with them, it’s quite unlikely to get adequate financial support from the government after you have retired. Now though the scenario may turn out to be different for people living in different countries, the overall picture seems to be pretty much the same, especially for the developed and even developing economies. In fact, most of the developing economies hardly have any retirement benefits in store for their residents. This in itself shows how important retirement planning is, especially for the citizens of such developing economies. Taking matters in your own hands However, most of the people hardly know anything significant about retirement planning, and hence they usually have to rely completely on the so called financial planners, who may or may not take much interest in understanding their financial condition completely. This is what leads to poor financial condition of so many people across the world after their retirement, including in the US. Most of the people don’t have much idea about how their retirement planning is going on. So, why not take the matter in your own hands by understanding the basics of retirement planning? This will ensure a much better financial state after you retire, regardless of whether your financial planner pays a lot of attention to your financial future or not. You may even be able to make out if they are working seriously on your retirement planning or not. What retirement planning is all about? Well, to put simply, it simply means ensuring that you get enough passive income after your retirement to cover for all your expenses. In order to achieve this, you will first need to do a bit of an analysis of your current expenses. Then, you need to take the inflation into consideration. You may also want to decrease or increase the final figure a bit, depending on your state of health, the standard of living you wish to maintain after you retire, and so on. So for example, let’s say you are currently spending $1000 a month and you plan to retire after 20 years. Depending on the country you are living in, the rate of inflation will vary. Let’s take 3 percent in this case. So, you now need to increase the figure of $1000 by 3 percent every year. This seems to be turning out to around $1800. This means that you would need an average of $1800 per month after your retirement. Now, assuming that you would be able to fetch an interest rate of say around 6 percent per annum by investing your money in a safe investment option, you would need a corpus (amount of money at your retirement) of around $3,60,000. We will now move on to learn about how to build a corpus of $3,60,000 in 20 years. This time, assuming that you manage to achieve a rate of return of about 8 percent in your working years, all you would need to do is invest around $600 every month. Does it sound too good to be true? It actually isn’t. In fact, it’s just the power of compounding of money. A final word Though the above given calculation may seem too complicated and even a bit weird to some, they are actually pretty easy. You can do all such calculations easily by using an excel file. Hope the above given basic but useful overview of retirement planning in its real sense will turn out to be quite helpful for you in planning your retirement.