Investors India|September 2020
Here are a few basic things to have a comfortable retired life
Sanjeev Puri
Retirement is one distant financial goal that is largely overlooked by most. The irony is that it for those who pay attention to it earlier in life stands to gain than those who do not. With longevity in life span, the nonearning period in one’s life is liable to make one’s retired years not-so-happy if one doesn’t plan in advance. The earlier one begins to save for retirement, the lesser is what is required.

But, not all of us think alike. This makes some of us contemplate exiting the rat-race prematurely and not lead the usual route to retire at around age 60. For those who are looking to retire early, the decision might be guided by medical, personal or professional reasons. If that happens, one needs to make a large number of changes. You will have to plan your portfolio keeping the new goal in mind. You will have to adapt to the new conditions that arise out of your decision both emotionally and financially. Your investment portfolio needs to be revamped according to your changing needs and risk appetite.

Early retirement might require you to reskill yourself. Develop an action plan for it. For someone starting out at 25 and retiring at 60, the nonearning period spans almost another 25 years with the kind of life expectancy experienced nowadays. For those retiring early, this non-earning period may well be 35-40 years! A longer retired life means a longer period of combating the ill-effects of inflation. Accept that early retirement could entail compromises. This could be both before and after retirement and could mean a more considered approach to spending.

The first thing would be to fix the early retirement age and work towards it with a clearcut plan. Prioritize your goals and fix numeral targets for each of them which would include buying a house, buying a car, the child’s higher education, and many others. Remember, major goals such as kids’ higher education and marriage, which involve large resources, could likely be after your early retirement.

Once you decide to make regular investments towards your retirement plan, be sure to exploit the full potential of equities as it has delivered the most among all asset classes in the past. Mutual funds have proved to be the ideal vehicle for retail investors to take advantage of the excellent long-term growth of stock markets.


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September 2020