The past 2 years have been absolutely chaotic due to the pandemic. Many of us overlooked key financial tasks as we struggled to stay afloat and used up our retirement savings. With Financial year 2021 closing, it's time we get our finances in order to maximise tax savings and move closer to our financial goals.Whether it's the beginning of your career or you’re still in the stage of figuring out your future plans or you’re preparing for retirement, here are a few things you must have in place as you step into the new financial year :

# Taking a closer look at your Bahi-Khata (Portfolio):

Year end is a good time to review how your investments have been keeping up. You must keep track if your portfolio is growing by at least more than the rate of inflation just to make sure that your investments are fetching good returns.
Based on this we can further work on the asset allocation of our portfolio. We must re assess our risk taking capability and accordingly re-invest in debt/ equity/ Alternate assets etc.
You must also check if you’ve diversified your investments well into different industries and that you’re not heavily exposed to a single industry. If one’s portfolio lacks diversification, then a small fallout in a single industry can show a heavy downfall in your portfolio as well.

# Income Tax Planning :

Tax planning is one of the most important activities that we must plan as we near the end of a financial year. It is important to review the differences between the new and old tax regimes every budget and figure which works best for you. There are investment instruments like PPF, ELSS etc that provide tax benefit upto Rs. 150000 under 80(C) and hence its important we invest in these instruments in order to save on taxes. Another instrument where we can invest is the NPS which further offers additional tax saving of Rs.50000 under the same bracket. A Chartered Accountant can advise you on which scheme is better and help you assess your risk aptitude, which will further lead you to generating better returns.

# Planning your Debts and Loans :

If you have ongoing loans, then our first goal should be to payoff the loans as it slows you down on your goal to becoming financially independent. Paying high interests and life long EMIs can be a difficult task hence we must seek to avoid them in our individual accounts. You must steer clear of your credit card debts as soon as they crop up as they can show up as big figured bills and haunt your earnings.

# Ticking off your Goals

You can create a sheet of your financial goals and have a track of how much of it has been achieved this year and new goals( if there are any) at the end of each financial year. This will help you to analyse the speed at which you’ve been able to achieve your goals and how you can further speed up the process. This can be done by either increasing the proportion of savings directed to investments or by stepping into higher risk bracket investment instruments like mutual funds and equity etc.

# Starting a Retirement fund

Saving for retirement is something that many people start in their mid 30s to 40s. However this is something that should start way early when you’re in your 20s. Starting small but starting early can take you a long way. Think of when you’re 60, what is it that you want to be doing then and how are you planning today to make it possible then. All of the things that you’ve thought of can all come true if you had funds and that’s possible with better retirement planning. Your best friend in your investment journey is compound interest. e.g. If you have invested Rs.10,000 for a period of 50 years earning 10% on it, you will get Rs.1173908 at the end of 50 years. That’s the power of compounding and it can certainly happen to your money given you’re a consistent investor. With PensionBox’s application, you can very easily track your retirement savings and figure out investment avenues. [PensionBox](https://pensionbox.in) is here to fulfil all our retirement needs/dreams if you want to fulfil them.

The past 2 years have been absolutely chaotic due to the pandemic. Many of us overlooked key financial tasks as we struggled to stay afloat and used up our retirement savings.

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