Fill the Income-Expenditure Gap

Whether there will be an income-expenditure gap in retirement depends on several factors, including your current income, lifestyle, savings, investments, inflation, and post-retirement expenses.

- PV SUBRAMANYAM

This gap is a concern due to rising life expectancy, increasing healthcare costs, and no social security. When you are about 10 years away from retirement, ask yourself these questions:

• How much is your monthly expenses on electricity, society charges, food, travel, fuel, salaries to cook, servants, etc.,

• How much do you really spend on buying food, eating out, etc.

• Expenses on special occasions—marriage of siblings, children of siblings, other events, festivals, etc.

• Vacations and other annual expenses—insurance, etc.

Income Sources in Retirement:

• Pension: Limited to government or organised sector employees

• Investments: Returns from fixed deposits, mutual funds, dividends, or rental income.

• Savings: Withdrawals from savings accounts, PPF, NPS.