Have you applied for the membership of the Golf Club that you plan to play Golf after your retirement or did you bought the tourist guide book that has the mention of all the beautiful places you plan to see on your 45 days trip to Europe/within India after retirement, How about identifying hillside/seaside plot to build your retirement home. If all this has already been planned, how about charity work that you always wanted to do. Post retirement period is real fun, no deadlines, no zoom meetings, no monthly conferences, no weekly reviews, no worry of that 5% increment every year and on top of it no rushing to office to meet 9.30 am entry to impress others. When there are no such deadlines the period is aptly called Golden period of life….its like living a heavenly life where there are no worries, only life to be enjoyed to reach the beautiful end called life cycle completion….Its like the best part of the movie is last 15 minutes before it finally ends.
In our society as compared to western world, Retirement means compromising with life style and start living within your pension. 95% plus people who retire from jobs with pension actually start compromising on some or other things and 100% of the business people or corporate employees with no pension actually feel life has come to a dead end at sixties. Given the increased life expectancy at 85-90 yrs and better health services available we are soon going to be a country like Japan where in people living for 90 yrs and beyond will be quite common. Living for 30-40 yrs post retirement in any sizeable city in India is going to be expensive enough. Unless you have a big pool of money planned well in time this retirement period can be biggest pain of lifetime.
The top most planning of morden life has to be retirement planning, there are loans available for everything else. Children may study on scholarship as well, they will get married too, life will keep moving on but if by little mistake you happen to miss out on your Retirement Planning….no one will listen to your cries because the blunder was your own creation. If you are in your thirties or early forties, time is NOW….its like buying an airline ticket, earlier the better and instant would be too expensive, sometime unaffordable too. Before you actually convince yourself that YES you need a Retirement Plan….the question arises, how much is good enough, either you need to be an excellant mathematician or you need to reach out to a professional advisor to do it for you. Thumb rule is decide the city you are most likely to stay post retirement, make a list of all your hobbies you want to indulge into post retirement, If you still have 20 Yrs to your retirement multiply monthly expanses by 4 times (i.e if your family expanse is 50K/pm today you will need 2 Lakh/pm 20 yrs from now and about 3 lakh plus 30 yrs from now). Don’t feel surprised, you actually used to manage your home with 12K/pm about 15 yrs back. A upper middle class family needs a retirement fund of about 3.50 – 5 Crore as a minimum benchmark to have a smooth expense flow that can maintain same life style as you are used to live today and helps you beat inflation too. While in service you have certain facilities like Accommodation, Electricity, Domestic Help, Driver, Gardener etc, they come to you easily but does this mean post retirement you will not need these facilities…..you certainly will, because your status would have gone for huge change in next 10-15 yrs and all these facilities would come at a huge monthly cost. Your pension may be just one source but you will be spending in multi layers. Unless you have a parallel fund that supports you, Your golden period will not have all that glitter.
One needs to be extremely positive about life & long healthy living to create a Retirement Fund a pessimist will always delay it for yrs n yrs. Actual age to create a Retirement Fund is between 30 – 45 yrs, few thumb rules that one must keep in check is
1. Think long term, don’t keep an eye on your Retirement Fund for immediate financial challenges, they might come & go but Retirement is a long term Goal.
2. Choose aggressive equity participation in first 10-12 yrs if you have 15-20 yrs period to plan your retirement Fund.
3. Choose your investment partner wisely and don’t go for very lucrative offers that double your money every 3 yrs or so. With your retirement planning Brand value matters.
4. Keep adding money to your retirement fund as and when you get an increment or windfall gain. This will give good strength to your Fund and build it Big
5. Make Retirement Fund a priority now n always. This will be the only companion you will have even if you live for say 100 years
As they say Mutual Fund Sahi Hai….to build an adequate Retirement Fund there is no second thought about this slogan. Mutual Fund is the best way to build your Fund actually.
SBI Retirement Benefit Fund is a ready solution for you to start building an adequate Retirement Fund for your Golden Period. Get benefitted with NFO at a unit price of Rs. 10 backed with Age Based Auto Transfer Plan and SIP Insure feature also benefits you with 100 times of Risk Cover of your monthly SIP. Rs. 10000/pm SIP for 20 years would mean 1 Crore* worth Retirement Fund.
Delaying your Retirement planning would be too expensive. Understand it now & plan it with perfection. Your Retirement Fund is your Pride…..build it very well
Kamal K Sharma is Founder at SaveFirst – A Financial Litercay platform for Armed Forces. For more details on Goals Based financial planning do mail us 9501017769.kamal@gmail.com or call at 9501017769 for services across India.
