The importance of retirement planning should crawl within an individual at a very early stage of earning. However, young income earners ignore retirement planning or rather delay it. Overlooking retirement planning at an earlier stage can lead to several problems after retirement. However, young earners who plan their retirement earlier get to avail rewards of their smart decisions. In this blog, we shall answer the question “how young income earners can start their retirement planning earlier” and provide tips and tricks for a better and stable future. 

## Tips for young income earners to save more for retirement

### 1. Start small

It is a common misconception that a huge amount of money is required for investment. Young income earners believe that to start an investment, they will require large amounts, and hence they push the retirement investment process to further years. However, that is not the case. Young income earners must inculcate within themselves a habit of timely and consistent savings and investments. This should be done regardless of how much the initial amount is. Even if young income earners start with smaller amounts, it is not a cause for worry. They must keep in mind that they are contributing consistently, without fail. Over time, even small but regular contributions can bind up to become a significant amount of savings over the years. And if young earners plan for retirement at 50, early retirement planning tips can benefit them enormously. 

### 2. Making the right investments

The biggest step in **“How young income earners can start their retirement planning earlier”** is by determining the right investments. Several investment schemes help save taxes and increase income, thereby leading to more savings for retirement. 

**Some of the best investment schemes through which young income earners can save more for retirement are listed below-**

**1. National Pension Scheme or NPS-** 

[National Pension Scheme](https://pensionbox.in/blog/What-is-NPS) is a great retirement investment plan, especially for young income earners. Anyone in the age group of 18-70 years, public or private employee, resident or non-resident can become a part of the National Pension Scheme program. 

- 1. [Section 80CCD(2) of the Income Tax Act](https://cleartax.in/s/section-80ccd) covers the contribution of an employer towards the NPS contribution. 

- 2. [Section 80C of the Income Tax Act](https://www.iciciprulife.com/insurance-library/income-tax/what-is-section-80c-of-income-tax-act.html#:~:text=Section%2080C%20provides%20deductions%20on,individual%20towards%20specified%20pension%20funds.) covers the tax deduction of ₹1.5 lakh for self contribution to the National Pension Scheme.

- 3. [Section 80CCD(1B) of the Income-tax Act](https://cleartax.in/s/section-80-ccd-1b) covers the additional deduction of ₹50,000 which is allowed if a contribution is made towards the NPS scheme. You can easily calculate NPS using the [NPS calculator](https://pensionbox.in/calculators/nps-calculator). 

**2. Life Insurance-** Investment in Life Insurance is one of the most common and effective retirement investment plans for young income earners. [Section 10(10D) of the Income Tax Act](https://www.edelweisstokio.in/b/tax-saving/guide-to-tax-exemptions-under-section-10-10d) suggests this provision. Additionally, through tax deduction under Section 80C, exemption is provided for investment in life insurance. Investment in life insurance is eligible for a tax exemption of  ₹1.5 lakh through Section 80C of the Income Tax Act. It is to be noted that this exemption provision is available to employees who have opted for the Old Tax regime. However, Section 10(10D) is available under both the Old Tax Regime and the New Tax Regime.

**3. [ELSS- Equity Linked Saving Scheme](https://pensionbox.in/blog/Equity-linked-saving-scheme) is another investment scheme that young income earners can incorporate in their retirement planning. This provision is available under Section 80C of the Income Tax Act. A tax exemption of  ₹1.5 lakh is permissible via Section 80C. Investment in the Equity Linked Saving Scheme is beneficial in several ways. The lock-in period of ELSS is 3 years. The investment is flexible through this scheme, which makes it attractive for young income earners.

**4. [PPF- Public Provident Fund scheme](https://pensionbox.in/blog/PPF-Account:-A-Long-Term-Savings-Solution-for-Individuals) is another retirement investment plan that attracts young income earners. PPF is quite a popular term amongst taxpayers. It gains popularity from the fact that it is categorized as a tax exemption method. Under Section 80C of the Income Tax Act, investment in the Public Provident Fund is eligible for a tax exemption of up to ₹1.5 lakh. Under [Section 10 of the Income Tax Act](https://cleartax.in/s/section-10-of-income-tax-act), interest and maturity are relaxed from tax. The lock-in period of the PPF account is 15 years. 

### 3. Staying ahead of inflation

Designing a solid retirement plan at an earlier stage allows young income earners to be steps ahead of inflation by the time they reach their retirement years. Inflation automatically decreases the purchasing power of money, and in a way decreases income and saving. Hence, it is absolutely vital to ensure that your savings grow at a rate that is symmetrical with growing living costs.

### 4. Creating a balance of goals

Young income earners may have several goals and aspirations that they wish to fulfill along with saving for retirement. It is important to create a balance of different goals so that they don't coincide with your retirement savings, but at the same time fulfill your needs.

### 5. Learning with a professional mentor

Financial knowledge and retirement planning is not something that young income earners are born with. Hence, professional guidance and mentorship can help to take the right paths in the financial journey of life. PensionBox is happy to cater to the needs of young income earners in their retirement planning journey. 

Though many young income earners may overlook the fact that they need to start saving early for retirement, it cannot be denied that taking this step is very crucial in today's economy. Plan your finances with [PensionBox](https://pensionbox.in/) and live a stress-free life! You can also use a [retirement planning calculator](https://pensionbox.in/calculators/pensionbox-calculator) for insightful thinking.

The importance of retirement planning should crawl within an individual at a very early stage of earning. However, young income earners ignore retirement planning or rather delay it. Overlooking retirement planning at an earlier stage can lead to several problems after retirement. However, young earners who plan their retirement earlier get to avail rewards of their smart decisions. In this blog, we shall answer the question “how young income earners can start their retirement planning earlier” and provide tips and tricks for a better and stable future. 

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