Plan Your Retirement

While all of us have loved Amitabh Bachchan in Baghban, we wouldn’t wish something like that should happen to anybody in real life. There was time when 60 was the optimum age for retirement. Now the tables have turned and 60 is the new 40. The life expectancy rate of an average individual has increased by 20 years. And with this, the standard of living, earnings, opportunities and whole social and psychological system has improved and increased. 

The question is whether the increased life expectancy rate will bring about a paradigm shift and if yes, how? And, to live a long fruitful life, is health the only imperative or financial security has as much meaning too? Let's compute the retirement age, which is 60 and average life expectancy, which is 75 in urban areas for males and 80 years for females, a good part of life is left to live  doing what you always wanted to do. But is it possible to have a dream life with no money, and when does one start planning to have that kind of a life?

There are many products catering to this need (pensions, fixed deposits, mutual funds, medical insurance, etc) but how to choose what is the best for you since options are many; and all these options should comply with your needs, dreams and goals. If only a few steps are drawn and monitored, this process becomes relatively lucid and effortless.

Start building a retirement corpus

According to experts, you will require at least 70% to 80% of your last drawn salary on an yearly basis to live comfortably for 25-30 years to come after retirement. Agreed, your loans may be paid off, you would be paying lesser income tax and there would not be any expenses for raising a family or any work related expenses either, but cost of living would go up thanks to inflation and having more hours of leisure at your disposal would also require more money to be spent. After retirement your income inflow would stop, however out flow would go up. For example if you spend Rs 25000/ per month for your household expenses, after 15 yrs you would need Rs 79305/- for the same expenses at 8% inflation. Not many would want to compromise on the standard of living hence start building a retirement corpus at the earliest.

If it's worth thinking about, it's worth writing about

Sit with a pen and paper and decide upon what you need in life. It could be a house you want to have at sea face or a farm house with a swanky car and beautiful library at your home. It could be anything. Practice 'to each his own' and jot down things you need and deserve in life. Also, set the time in which you want to achieve your goals. Thinking what you will do in the latter half of your life and actually doing it are two different things. It has to be crystal clear as to how much money you will need each month for day to day use. This might seem a little too early to contemplate but when it comes to life, you can never be too prepared.

Be informed, be powerful

Information is power. Know what is happening in the market. What all schemes are promising and how returns can be capitalized in full capacity. Sit with your financial planner and dedicate time for the life you are going to live one day. 

Monitor the planned graph

This is the critical part. Deciding on how will you achieve that goal or dream of yours. What you need to do to achieve those goals? What kind of investment will help and how much savings is required? A financial planner will be of definite help since he knows the best. A lot many options may be available to you depending upon your financial condition and other factors, to achieve your goals. So what are these options? These questions are to be answered in all sincerity.

Uncertainty - inevitable

No matter how depressing it sounds, always be prepared for the worst. Know that things always don't work according to plan. Have an emergency plan, one that is not drafted when emergency strikes but one that is put through practice in time of need. Chalk out the ways as to how to reduce risks, what measures need to be taken up while being under strenuous and tricky situations and how to cope up with them.

Also, one needs to draw up a plan to seamless transfer your assets to your children or any other beneficiaries once you are not around. Truth is, the old age is a boon in many a ways, only if you are a little prepared and planned monetarily. Happy retirement planning. Stay Blessed!!