Retirement A Milestone in Your Life ! Make The Most of It !
Rahul Khatri of Param Investment Mutual Fund Services
Retirement does not mean the end of the world, it is the beginning of a new life, things that you always wanted to do in your 20’s, 30’s, 40’s or 50’s can now be looked upon and pursued which could be pursuing a hobby, helping some NGO’s, spending time with your children/grandchildren, etc.
But before we get onto that journey, we need to ensure that following are well taken care off:
Adequate Medical Insurance: The one major reason which could lead to depletion of corpus could be due to hospitalisation of self or spouse. Having yourself adequately covered will help avoid this trouble. The medical inflation is almost double the normal inflation, planning well for this is very important as our retired life could be as long as 30 to 40 years.
Get your Will ready: We love to push this work for another day, most feel it’s a complex job, but if you really sit to write your Will its not that complex, there are formats available online, on various website which help you make your will. Even there are professional Solicitors who help you do this work very effectively.
Complete all your liability: Ensure that no home loan, car loan, personal loan or child’s education loan is pending, this will help you lead a stress-free retired life.
Create Emergency corpus: Always keep a decent amount of corpus available to you at all points of time, maybe this could be a flexi deposit with a bank, Mutual Fund liquid funds, etc. This is not only important for retires but for every individual responsible for running the house.
Regular flow of money: As the regular stream of income (salary/ business income) stops post retirement, we need to ensure the investment we do provide a regular un-interrupted amount for the years to come. This could be done by investing in Senior citizen savings scheme, Fixed deposits, Systematic withdrawal plans in Mutual Funds, Post office Monthly Income Scheme, etc.
Ensuring corpus grows faster than inflation: The one basic aspect we forget is to ensure our corpus that keeps pace with inflation. As we invest our money in fixed instrument and enjoy the interest from it, the challenge comes when the instrument matures, inflation eats away the corpus and the interest rate may reduce thereafter. This leads to deeper trouble as the year goes by. To beat inflation whether we like or no, a small portion of our money needs to be invested in equity/ hybrid funds and ensure that we do not eat into our capital. Although we all feel equity investments are risky but the bigger risk is inflation over the years. A gradual and systematic approach to equities does help beat inflation which can turn its ugly head over the years.
Views are personal: The author is Rahul Khatri of Param Investment Mutual Fund Services
Disclaimer: The views expressed are of the author and are personal. TAML may or may not subscribe to the same. The views expressed in this article / video are in no way trying to predict the markets or to time them. The views expressed are for information purpose only and do not construe to be any investment, legal or taxation advice. Any action taken by you on the basis of the information contained herein is your responsibility alone and Tata Asset Management will not be liable in any manner for the consequences of such action taken by you.
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