Some Thoughts on Retirement Planning

 

 

Hi Friends, today we have a new blogger joining us in serving his tiome on earth… He is Ganesh. Ganesh comes from an extensive financial experience. He is a Financial planner for High networth individuals (HNI). This happens to be his maiden post. Great to go ganesh…There is nothing certain except DEATH ! This should never stop anyone from planning for the later years !A Gentleman aged 65 years, who was my neighbour, requested me to get a job for him. He said his monthly requirement is a minimum of Rs.10,000/-, for which he had no other option than to take up a job. This person was with a pharma company, retired from the rank of a Regional Manager. Surprising !!!!!!

Similarly, a relative of mine often gets himself into troubled waters, by taking more loans than what he could pay. I have two more cases of aged people, struggling for day to day living, with whom I am interacting on a daily basis.But the eseence of the experience is one and the same.

If they had saved something for the later years, they would have been self sufficient or rather happy. This is where the concept of RETIREMENT PLANNING is apt.

What is Retirement Planning all about ?

It is a two step process

1) Build a corpus, by contributing atleast 10% of annual income, on a regular basis, every year

2) Invest this corpus at a later date, to get safe and steady returns for covering the risk of living too long

For building a corpus, there are Options to choose from :

a) Conventional Pension Plans

b) Systematic Investing in Equity Mutual Funds

c) Market Linked Investments like ULIPs

d) Investment in Real Estate

Depending on one’s risk taking ability & income, these options have to be considered. Some times, it would be better to have more than one option like real estate and conventional pension plans, in order to have an effective risk reward ratio.

Do’s & Dont’s

1) Start as early as possible (Boris Becker won wimbledon at the age of 17, investing is certainly not tough like winning wimbledon )

2) Review once in 3 years

3) Give Investments time to grow

4) Beat Inflation

1) Don’t utilise the fund for emergencies

2) Don’t diversify too much

3) Don’t underachieve retirement corpus

As the great Financial Educator Robert T Kiyosaki says “ONE BITE AT A TIME IS HOW YOU CAN EAT AN ELEPHANT “. A little contribution towards retirement corpus on a regular basis, started early, can definitely end up becoming a huge elephant.

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