Many of us dream about retiring early from active career to pursue our interests or hobbies. But for that one has to plan in advance and make wise investment decisions to ensure that post-retirement we have the financial resources not just to live independently and comfortably, but also to achieve all of our goals. Here are a few things to keep in mind while planning for an early retirement.

Estimate the retirement corpus: The first step towards planning retirement is to go to the drawing board and calculate the corpus that you may need at the time of retirement. The corpus should factor in your current expenses, life expectancy, future medical expenses, number of dependents and the expected rate of inflation. There are several online calculators too that you can use for making estimates of your retirement corpus.

Estimate the tenure: The sooner you start saving towards retirement, the better it is as that will enable you to build a larger corpus. Hence, it's advisable to start investing early during your earning years when you have a better appetite for risks and can invest in market-linked products that have an orientation towards equities. When you save regularly and for a longer term, your investments get the advantage of time in the market, and equities have, historically, delivered higher returns in the longer run, thereby enabling you to build a large retirement kitty.

Choose the right plan: Choose a plan that is designed to help you meet your life goals. Your investment plan should be such that factors in inflation, and at the same time, is in keeping with your risk appetite and life situations. Investment in Unit Linked Insurance Plans (ULIPs) is one of the preferred choices as it is a long-term product and invests in a variety of funds like equity, debt or a combination of both. If you have a high risk appetite, you can invest in equities as it has the potential to give higher returns in the long term. One can go for a combination of equity and debt to get better returns and also to minimise risk. Further, the lock-in period in ULIPs encourages disciplined savings habit and is designed to help you meet your long-term goals.

Another thing to do before you decide on the right investment plan is to check the products online to understand their features and benefits, and their past performances to zero-in on the right plan as per your needs and life goals.

Plan for regular income: Even if you have a fairly good retirement corpus, it is important that you use the corpus judiciously so it lasts longer. It is, therefore, important that you have a source of regular income post-retirement. A part of your corpus or whole corpus can be used to buy an annuity plan that guarantees you a regular income for lifelong.

Take care of health expenses: As you grow older, the healthcare expenses are likely to increase. You must factor in these expenses while deciding on the amount required for retirement to ensure that healthcare expenses don't deplete your retirement corpus.

Periodic review: Your lifestyle and aspirations will continue to evolve as you move from one life stage to another. It is, therefore, essential to regularly review savings and investments allocated for the retirement fund. As a rule, review your plan and investments regularly (as per the life stage), and if you think your retirement corpus is falling short of the target, increase the investments or change the asset allocation to meet the target.

Planning for early retirement is not just about building a large corpus but it is also about making sure the corpus lasts longer. It is, therefore, very important to choose the right investment plan which will not just help build corpus at the accumulation phase, but also continue to earn returns during the redemption phase.

Early retirements can be fun only if you plan early and smartly to ensure you lead a comfortable retirement life.