Think Twice, Retire Wise
October 1, 2021India is the second populous country in the world with about 1.3 billion people. But; with an average age of 29, the country has one of the youngest populations in the world. This is indeed good news to the country and economy as well. With the rising skill set, the booming consumerism, rising opportunities, rising inclusiveness and cultural diversity; the country will grow along with the young workforce. Let’s fast forward to 30 years from now. Now, we can see that the population has now entered the stage where the entire force will be up for/in retirement. For this retirement phase to be relaxing and fruitful, we need to have a solid and robust corpus. But the real question is – Do we have the ample amount for that? Do we Indians realize the importance of retirement planning?
We Indians; have our own culture imbibed in our lifestyle; however modern the country is shaping up into. Unlike in the west, the children still live with their parents until they become financially independent. So, a large number of our earnings and assets are focused on the current well-being and education of the children which we consider our prime responsibility. This is good to some extent; which is; planning for our kids’ well-being. But serious thought should go into our well-being also at the same time. By the time, our children attain self-sufficiency; we will be past our prime and if most of our spending is focused on them; there will not be ample capital for our own life after that. With improved living conditions and advanced medical facilities, life expectancy is on the rise than it was 10 years before. With the advances in medical science; there is another factor that is to be considered seriously – medical expenses. As the age increases, we are susceptible to more ailments during old age which is going to cost more money. Another important reason for retirement planning is the pension factor. The pension earned from any government organization or private employer might not be sufficient enough to cover a good retirement life on its own due to the rising inflation. We might need to rely on different pension plans or related schemes to boost our pension.
With the fast-paced lifestyle and increasing population moving out to different places for jobs; most of the Indians are moving to a nuclear lifestyle which in turn changes the living patterns. Retirement has to be planned to supplement these new living patterns. Also, many people have their own goals charted out to follow after retirement – be it travelling to different places or following their hobbies/passions. After working all through their life, people will need capital to follow their passions. Above all, the ever-important factor that affects any person is the rising inflation that the economy and in turn every individual has to experience. Rising inflation means rising costs and at an older age, we should have sufficient money to tackle the same. Now, let us go back to the pressing question that we encountered at the start. Are Indians aware of the importance of retirement planning? From what we have seen in recent years, there is increased awareness among people and they have started thinking about the significance of accumulating money for retirement. But still, there is a whole lot of population who does not realize the importance yet. By the time they attain retirement age, most of their hard-earned money would have been spending on their standard of living and kids’ welfare. That comes to the question: how do we set about saving money for retirement?
This is not rocket science and can be planned with proper foresight and planning. We can start by spending and investing wisely. We can reduce unwanted expenses which help us to accumulate a pretty decent amount of money and the wise investment of which can be fruitful. There are a lot of pension-related schemes which can be explored for better returns and then if invested properly can build a decent enough corpus. We need to know the rate of investment and adjust the inflation to calculate the retirement corpus needed for a safe retirement. It would be advisable to plan and start early so that we have years between us and the retirement age to plan better. Having a target retirement age also helps. At the same time, we need to have an idea of the liabilities as well that we are incurring or might incur down the path. And the big word Inflation needs to be considered at every step.
Like a wise man once said, you don’t live your life twice. Humans are not machines and after a long career, they need a better chance at a relaxed life. A serious thought on the same now can secure that life for you. A seasoned financial advisor will be able to help you out in preparing for this and a good piece of advice is never a waste of time and money. Expect the unexpected and prepare yourself for that phase of life where you can allot time for yourself after a long period of work and sacrifice for your loved ones. The next time you think about spending money, think if it is needed. Think twice and retire wisely!!!