Retirement Planning

Importance of Retirement Planning

Retirement: Today is not the same as it was for our parents generation. The generation today does not want to fade away into woodwork. We want to live a full life after retirement. We want to maintain an active lifestyle and not be dependent on our children. Hence retirement planning takes on a very important role.

What to do after retirement?

After your retirement you are exposed to the following Risk,

Inflation: Which is the biggest challenge for your Financial Freedom after Retirement
Re-Investment Risk: Which arises with fluctuation in Interest rate and longer Life
Taxation: Most of us are unaware of tax implication on investment, resulting lower post tax return
Medical Emergencies: Medical emergencies can eat up your Nest Egg Corpus.
Goals and Aspiration: You may have left with Goals and having aspiration even after Retirement.

Retirement planning involves fitting together many puzzle pieces to provide your ideal situation. 

  • 1. Ensure Monthly Income – Pension and Interest on investments as per your need, risk appetite and return expectation.
  • 2. Medical-Health Insurance of self and spouse is a must as in old age expenditure on medical expenses is uncertain and can make the life miserable if not adequately insured.
  • 3. Provision for marriage expenses of unmarried children and impact of this expenditure on Monthly Income as per (1) above.
  • 4. Due to inflation and devaluation of currency the purchasing power of an unit of money is declining daily. Out of monthly income one has to save and add to investments so as to increase  the monthly income to an extent that nullifies the impact of inflation and devaluation.
  • 5. Liquidity of the investment is very important.
  • 6. Risk taking capacity decreases with the increasing age and one should avoid taking risks with his/her life long savings.
  • 7. Pensioners may invest 65% of their investible funds in low risk, 30% in Medium Risk and  5% in high risk categories or as per one's risk appetite. High Net worth Individuals can invest 60% in low risk, 30% in medium risk and 10% in high risk categories.
  • 8. It is Advisable to hire a Professional to Plan your Retirement with a proper Risk Assessment, Asset Allocation and Tax planning and regular review to ensure Financial Freedom.
  • 9. You must take care of your Nest-egg by ensuring:
    • Maximize returns on investments with lower risk.
    • Minimize risk of capital loss. Don't Gamble and stick to a disciplined approach.
    • Invest in such a way that you get the maximum tax free interest income.
    • Build a Contingency Fund.

Maintain the following documents carefully:

  • Details of Bank Lockers, Key Numbers and upkeep of Keys.
  • Details of Bank Accounts and other investments.
  • Details of Bank Lockers, Key Numbers and upkeep of Keys.
  • Proper upkeep of Cheque Books, Share certificates, De-mat accounts, Life Insurance Policies, Health Policies along with 3rd party ID Cards, Pension Papers, Recoverable and Payable money from/to friends and relatives, Title deeds of Property, General Power of Attorney if given to anyone, Original Will (Execute if not already done) etc.
  • Proper upkeep of Password of email ID, ATM and Credit Cards, Bank accounts, online profiles, net banking, life insurance, vehicle insurance, De-mat trading accounts, Income Tax e-filing, and other valuables.

Ensure nomination in all investments accounts, lockers, Insurance Policies…

Nominate your Digital Assets also Timely Due to modernization and online culture more and more physical assets are being converted into Digital Assets. Retired and Senior Citizens being owners of such digital assets are not familiar with the system and procedures to pass on their digital assets to their legal heirs. In the future even your email ID's, Author Profile ID's on various sites, generating passive income may not find their legal successors. Even dedicated Mobile Numbers authorized to receive OTP or 2-step security passwords might also come with the option to have secret nomination of Mobile Chip to access the online accounts. Keeping in view the complexities involved as a senior citizen you will have to ensure that you have nominated for all your online profiles and digital assets along with supported mobile Chips.


Make A Will.