Taking Guard In Second Innings....

Hello friends

Today is Ganesh Chaturthi which is a very important festival for us in India.
It is also known as Vinayak Chaturthi that reveres God Ganesha. This festival celebrates him as the God of good beginnings, prosperity and obstacle remover. It lasts for 10 days.
So I also thought of making a beginning on another good topic which is on how to keep on working post retirement.
During professional career, all of us plan for our financial goals to cater to different phases of our lives and try to achieve them. It's a different matter all together whether post retirement needs are adequately taken care of in the calculations because most of us might not have been able to do it correctly. And especially in today's scenario when people do not have time for such planning it still becomes more difficult for them. In fact by the time you realize you are already there and ill prepared to lead a comfortable life post retirement.
There is a big difference in the month prior to retirement when you get you last pay cheque and the next month when you cease to get it. There is a sort of mental turmoil and you take time to adjust to the change scenario. But this can be faced with confidence and composure if you are well prepared for it by planning well in advance.
Also one would like to keep on working for few more years, say till the age of 65 to 70 years because it is not only a need in the current scenario but it also allows people not only to keep themselves engaged but also physically and mentally fit.
I for one found it very difficult to kill time post retirement though it was enjoyable for 2 to 3 months immediately after retirement.
 With increased longevity more and more people are choosing to work after retirement. Whether by choice or not, one thing is clear - it requires a lot of patience, perseverance and careful planning to build the 2nd innings career. You may have to change your lifestyle, plan finances and acquire new skills and knowledge. Ideally most learning has to be done during earning years, especially the finances.If you want to work after retirement because you were not able to save enough during working life, the 2nd innings career can be an opportunity to make amends.
However, there is another school of thought that one should retire early and live out of passive earning which a small percentage achieve.
It is also true that a few people can get extension for a few years in private sector companies but this caters to a very small percentage. The best way is to prepare well in advance by giving due consideration to all available options. It also goes without saying that one can always take help of experienced people in this regards.
The following may be considered by those who would like to be in the first category :
 1. Consultancy
 2. Teaching
 3. Professional speaking and writing
 4. Get attached with an insurance company
 5. Get attached to a mutual fund organisation
 6. Make hobby your career, say photography, sports, review writer etc
 7. Set up business on e commerce platform
 8. Blog writing
 9. Affiliate marketing
10. IT related activities, launch your own website
11. Child care
12. Equity market
13. Restaurant
14. Cab service
15. Proof reading and correcting
16. Copy  -  pasting
The above are a few areas which one can consider depending upon your expertise acquired in professional career but the important thing is to try to start learning about the same well in advance so that you are ready to undertake a smooth transition when the need arises. But one can add many more to the above list.
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Self employment is a little tricky.You need funds to set up your own business and also keep running your household. You can build the corpus required for the business with slightly higher exposure to equity but be a bit conservative on household expenses.
Whether you decide to extend your tenure in the current job or start a business or work part time in the field of your expertise or enter a new field, the key to success is to do something you love, albeit with enough resources to back the new beginning.
If someone has entrepreneurial capabilities he or she should never sit at home. All you need to do is to take the plunge and be passionate about your work and the rest will automatically fall in place.

Life is more beautiful, meaningful and productive when you choose to do something fruitful in the 2nd innings of your life.

Let us chase our dreams and make a career out of them.

Excited to be alive every single day


My blogs can be viewed on
https://familyisreal.com
kumarskumar.blogspot.com
My blogs @ SK 1955 on FB
@skumar272010 on twitter











1.

It's never too late ...

It's a little over two weeks since I posted my last blog. This is because I have been travelling for celebration of a special family event which is held on yearly basis. It has been a memorable event and this is what we look for as we catch up with our age. I could see, feel and be a part of the happiness which swept all of us. Time flies...Isn't it ?

But I also observed the changes in our physical appearances, the health related issues and other things which all of us are confronted with one way or the other.

This brings us to a very important topic of healthcare for senior persons.

In this blog of mine I continue on my favourite but very important ongoing topic of financial planning and security. And this blog is to do with health insurance.

With no formal training in the earlier days and even now to a large extent for that matter, many of us are not equipped to lead a comfortable post retirement life when the basic needs are confined to day to day living and health care apart from other activities which may vary from person to person. 

As we approach our retirement we are faced with possible monetary and emotional anxieties during impending retirement years. We are deeply concerned about funds for healthcare even though many  of us may be having guaranteed pensions for life. We have to accept that old age comes with high probability of medical needs and here comes the health insurance into picture. Nobody wants to be dependent on their children for this need because they themselves have to look after their own selves and their families. Moreover social security is not available everywhere and hence most of us in India are on our own when it comes to health insurance.

But this is one part of the story. The other part relates to what we have to offer to such people. 

It is not easy to get a fresh health insurance policy without a number of restrictions and exemptions and with affordable premiums. Also there are not enough insurance plans to cater to unexpected requirements. And to top it all there can be major ailments which may not have adequate protection in terms of insurance.

Though some changes have taken place in the last few years but there is still a lot to be done to help senior persons in their sunset years. What really is needed is to understand the real issues and bring in laws to make it convenient and with affordable premiums.

In many countries we can find insurance companies offering long term health care policies. The premiums are required to be paid during entire working life of a person enabling him or her  a secured insurance cover post retirement. This is what can be introduced everywhere for the benefit of elderly human beings.

The best way forward in my opinion is to keep a check on our health right from the very beginning so that the requirement of medical care other than routine is minimized. Also let us decide not to switch over to total retired life immediately after retirement but get involved in mental and physical activity like yoga, walking, reading, travelling etc. which will certainly go a long way in keeping ourselves fit. In fact this must go on even till our last breath. This apart we must have suitable health insurance policy, renewed every year in time.

And above all we should be in constant touch with ever evolving world and use it to our advantage if need be.

It's never too late to make a beginning ...

Enjoy life till the last breath ...



My blogs can be viewed on
https://familyisreal.com
kumarskumar.blogspot.com
My blogs @ SK1955 on FB
@skumar272010 on Twitter

It's never too late ...

It's a little over two weeks since I posted my last blog. This is because I have been travelling for celebration of a special family event which is held on yearly basis. It has been a memorable event and this is what we look for as we catch up with our age. I could see, feel and be a part of the happiness which swept all of us. Time flies...Isn't it ?

But I also observed the changes in our physical appearances, the health related issues and other things which all of us are confronted with one way or the other.

This brings us to a very important topic of healthcare for senior persons.

In this blog of mine I continue on my favourite but very important ongoing topic of financial planning and security. And this blog is to do with health insurance.

With no formal training in the earlier days and even now to a large extent for that matter, many of us are not equipped to lead a comfortable post retirement life when the basic needs are confined to day to day living and health care apart from other activities which may vary from person to person. 

As we approach our retirement we are faced with possible monetary and emotional anxieties during impending retirement years. We are deeply concerned about funds for healthcare even though many  of us may be having guaranteed pensions for life. We have to accept that old age comes with high probability of medical needs and here comes the health insurance into picture. Nobody wants to be dependent on their children for this need because they themselves have to look after their own selves and their families. Moreover social security is not available everywhere and hence most of us in India are on our own when it comes to health insurance.

But this is one part of the story. The other part relates to what we have to offer to such people. 

It is not easy to get a fresh health insurance policy without a number of restrictions and exemptions and with affordable premiums. Also there are not enough insurance plans to cater to unexpected requirements. And to top it all there can be major ailments which may not have adequate protection in terms of insurance.

Though some changes have taken place in the last few years but there is still a lot to be done to help senior persons in their sunset years. What really is needed is to understand the real issues and bring in laws to make it convenient and with affordable premiums.

In many countries we can find insurance companies offering long term health care policies. The premiums are required to be paid during entire working life of a person enabling him or her  a secured insurance cover post retirement. This is what can be introduced everywhere for the benefit of elderly human beings.

The best way forward in my opinion is to keep a check on our health right from the very beginning so that the requirement of medical care other than routine is minimized. Also let us decide not to switch over to total retired life immediately after retirement but get involved in mental and physical activity like yoga, walking, reading, travelling etc. which will certainly go a long way in keeping ourselves fit. In fact this must go on even till our last breath. This apart we must have suitable health insurance policy, renewed every year in time.

And above all we should be in constant touch with ever evolving world and use it to our advantage if need be.

It's never too late to make a beginning ...

Enjoy life till the last breath ...



My blogs can be viewed on
https://familyisreal.com
kumarskumar.blogspot.com
My blogs @ SK1955 on FB
@skumar272010 on Twitter

The Power Of Emotional Intelligence....

Hello friends



                                                             In today's world Financial Management is a key aspect of our lives and I always love to share my experiences on this subject. In fact this is what I have done in my last few blogs. But today I would like to dwell upon another important subject which impacts life of our younger generation.
                                                             It is Emotional Intelligence.
                                In simple words it is the capacity to be aware of, control, and express one's emotions, and to handle interpersonal relationships judiciously and emphatically. For most people, emotional intelligence is more important than one's intelligence in attaining success in their lives and careers. As individuals our success and the success of the profession today depend on our ability to read other people's signals and react appropriately to them. Hence it is imperative for us to develop the mature emotional intelligence skills required to better understand, empathize and negotiate with other people, particularly because the economy has become more global. Otherwise success will elude us in our lives and careers.
                                                             
 There are five categories of emotional intelligence :
1. Self awareness - This is the ability to recognize an emotion as it happens. Developing self awareness requires requires tuning in to your true feelings. If you evaluate your emotions you can manage them.
2.Self regulation - You often have little control over when you experience emotions. But there are number of techniques to alleviate negative emotions such as anger, anxiety or depression. a few of these techniques involve recasting a situation in a more positive light, taking along walk or meditation or prayer.
3.Motivation - To motivate yourself for any achievement require clear goals and a positive attitude. Although you may have a predisposition to either a negative or positive attitude, you can with effort and practice, learn to think more positively.
4.Empathy - The ability to recognize how people feel is important to success in your life  and career. The more skillful you are at discerning the feelings behind others' signals the better you can control the signals you send them.
5.Social skills - The development of good interpersonal skills tantamount to success in your life and career. In today's always connected world, everyone has immediate access to technical knowledge. Thus people skills are even more important now because you must possess a high emotional intelligence to better understand, empathize and negotiate with others in a global economy.
                                                But the million dollar question is are we really aware of it ? Are we inculcating this trait in our children ? In fact do we ourselves realize the importance of it ? Is there any opportunity for a formal training on it ? Unfortunately the answer in most of the cases will be a NO. Let's try to understand a more about it.
                                                Emotional intelligence plays an important role in developing social skills and creating healthy classroom environment through positive interpersonal relationships between teachers and students. It can facilitate the process of learning through harnessing the energy of positive emotions and controlling the adverse effects of negative emotions.
                                                It is highly beneficial in the areas of education, work and mental health. There are research evidences which prove that the success in varied life situations and academic achievement depends largely on emotional intelligence. Being high in emotional intelligence is more important than being high in academic abilities.
                                      School and college education is a phase in life which shapes up a personality and it is important for us to understand the psychological development of students during this age. The current indicator of intelligence for any student is measured by the academic performance and it becomes difficult to know if the performance of the student in academics is driven by any other factor or not. Academic achievement is the extent to which students acquire the knowledge, skills and proficiency that is taught to them.
                                      Emotional intelligence can be classified as the ability to perceive and express emotion and thoughts of self as well as others. In simple words, emotional intelligence can be understood if an individual fits into the dimensions life self - regard where he or she can accurately perceive, understand and accept oneself, interpersonal relationship where a person is able to establish mutually satisfying relationships and relate well with others, a person who can control impulse, solve problems of a personal or inter personal nature, is aware of his or her emotions, is flexible enough to adapt and adjusts one's feelings and thinking to new situations, can introspect, can mange stress, and is assertive in effectively and constructively expressing one's emotion and can empathize with others.
                                                 In the present educational set up where students are expected to perform multiple roles with efficacy and effectiveness, it is imperative to develop in them the right attitude and emotional intelligence towards the complexities of life which are unknown and they must not be taken by surprise when confronted with.
                                                                                         The students actually play no active role in the attainment of knowledge. Their entire education is passive and mechanical. To create confident students and to assure certainty of successful academic achievement , it is very important to develop their personality with emotional intelligence including stress handling traits. It would not only make them competent but also they will be able to analyse the reasons of failure and initiate corrective action as required..
                                                                Emotional intelligence is considered as a successful predictor of academic achievement. It has been claimed by the researchers that emotional intelligence predicts achievement at schools, colleges and universities.
                                                  It is also found that emotional intelligence abilities lead to superior performance even in the most intellectual careers. As a measured construct, emotional intelligence is predictive of academic achievement as well as success in the workplace.
                                                  It is also seen that relatively high anxiety improves performance on simple and well practiced tasks but lowers performance on new or difficult tasks.
                                                  By understanding emotions and how to control them, they will be able to express own feelings and others' feelings better. This will help to interact and communicate more effectively and forge stronger relationships, both at work and in their personal life.
                                                   The need of the hour is to formalize and impart a well structured training on emotional intelligence by including it in the curriculum. But most importantly the onus lies on the parents to demonstrate it to their children on a sustained basis, for them to emulate and imbibe.



Excited to keep on learning new things
Gratitude


My blogs can be viewed on
http://familyisreal.com
kumarskumar.blogspot.com
My blogs @ SK 1955 on FB
@skumar272010 on twitter

The Power Of Emotional Intelligence....

Hello friends



                                                             In today's world Financial Management is a key aspect of our lives and I always love to share my experiences on this subject. In fact this is what I have done in my last few blogs. But today I would like to dwell upon another important subject which impacts life of our younger generation.
                                                             It is Emotional Intelligence.
                                In simple words it is the capacity to be aware of, control, and express one's emotions, and to handle interpersonal relationships judiciously and emphatically. For most people, emotional intelligence is more important than one's intelligence in attaining success in their lives and careers. As individuals our success and the success of the profession today depend on our ability to read other people's signals and react appropriately to them. Hence it is imperative for us to develop the mature emotional intelligence skills required to better understand, empathize and negotiate with other people, particularly because the economy has become more global. Otherwise success will elude us in our lives and careers.
                                                             
 There are five categories of emotional intelligence :
1. Self awareness - This is the ability to recognize an emotion as it happens. Developing self awareness requires requires tuning in to your true feelings. If you evaluate your emotions you can manage them.
2.Self regulation - You often have little control over when you experience emotions. But there are number of techniques to alleviate negative emotions such as anger, anxiety or depression. a few of these techniques involve recasting a situation in a more positive light, taking along walk or meditation or prayer.
3.Motivation - To motivate yourself for any achievement require clear goals and a positive attitude. Although you may have a predisposition to either a negative or positive attitude, you can with effort and practice, learn to think more positively.
4.Empathy - The ability to recognize how people feel is important to success in your life  and career. The more skillful you are at discerning the feelings behind others' signals the better you can control the signals you send them.
5.Social skills - The development of good interpersonal skills tantamount to success in your life and career. In today's always connected world, everyone has immediate access to technical knowledge. Thus people skills are even more important now because you must possess a high emotional intelligence to better understand, empathize and negotiate with others in a global economy.
                                                But the million dollar question is are we really aware of it ? Are we inculcating this trait in our children ? In fact do we ourselves realize the importance of it ? Is there any opportunity for a formal training on it ? Unfortunately the answer in most of the cases will be a NO. Let's try to understand a more about it.
                                                Emotional intelligence plays an important role in developing social skills and creating healthy classroom environment through positive interpersonal relationships between teachers and students. It can facilitate the process of learning through harnessing the energy of positive emotions and controlling the adverse effects of negative emotions.
                                                It is highly beneficial in the areas of education, work and mental health. There are research evidences which prove that the success in varied life situations and academic achievement depends largely on emotional intelligence. Being high in emotional intelligence is more important than being high in academic abilities.
                                      School and college education is a phase in life which shapes up a personality and it is important for us to understand the psychological development of students during this age. The current indicator of intelligence for any student is measured by the academic performance and it becomes difficult to know if the performance of the student in academics is driven by any other factor or not. Academic achievement is the extent to which students acquire the knowledge, skills and proficiency that is taught to them.
                                      Emotional intelligence can be classified as the ability to perceive and express emotion and thoughts of self as well as others. In simple words, emotional intelligence can be understood if an individual fits into the dimensions life self - regard where he or she can accurately perceive, understand and accept oneself, interpersonal relationship where a person is able to establish mutually satisfying relationships and relate well with others, a person who can control impulse, solve problems of a personal or inter personal nature, is aware of his or her emotions, is flexible enough to adapt and adjusts one's feelings and thinking to new situations, can introspect, can mange stress, and is assertive in effectively and constructively expressing one's emotion and can empathize with others.
                                                 In the present educational set up where students are expected to perform multiple roles with efficacy and effectiveness, it is imperative to develop in them the right attitude and emotional intelligence towards the complexities of life which are unknown and they must not be taken by surprise when confronted with.
                                                                                         The students actually play no active role in the attainment of knowledge. Their entire education is passive and mechanical. To create confident students and to assure certainty of successful academic achievement , it is very important to develop their personality with emotional intelligence including stress handling traits. It would not only make them competent but also they will be able to analyse the reasons of failure and initiate corrective action as required..
                                                                Emotional intelligence is considered as a successful predictor of academic achievement. It has been claimed by the researchers that emotional intelligence predicts achievement at schools, colleges and universities.
                                                  It is also found that emotional intelligence abilities lead to superior performance even in the most intellectual careers. As a measured construct, emotional intelligence is predictive of academic achievement as well as success in the workplace.
                                                  It is also seen that relatively high anxiety improves performance on simple and well practiced tasks but lowers performance on new or difficult tasks.
                                                  By understanding emotions and how to control them, they will be able to express own feelings and others' feelings better. This will help to interact and communicate more effectively and forge stronger relationships, both at work and in their personal life.
                                                   The need of the hour is to formalize and impart a well structured training on emotional intelligence by including it in the curriculum. But most importantly the onus lies on the parents to demonstrate it to their children on a sustained basis, for them to emulate and imbibe.



Excited to keep on learning new things
Gratitude


My blogs can be viewed on
http://familyisreal.com
kumarskumar.blogspot.com
My blogs @ SK 1955 on FB
@skumar272010 on twitter

Art of managing retirement corpus...

Hello,


Financial planning and the art of managing our post retirement corpus is a fascinating topic to me and I am going to dwell upon it in my today's blog.
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Retirement is the act of  retiring or of leaving one's job, career or occupation permanently, usually because of age or early retirement because of critical illness and/or disability.  It's not an event but a long phase in your life that can last up to three to four decades  Your financial situation will certainly undergo a sea change when you retire. Your income is likely to fall and spending patterns often change as you grow older, for example you have paid all the loans etc which you might have taken for buying a house, child's education, child's marriage etc.
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During those decades, your corpus will be subjected to inflation which, in turn, will adversely affect  the value of your savings. If your savings do not give you enough return, you are going to run out of them within your lifetime and left high and dry on the financial front . 
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But there are ways and means to prevent this from happening. It would have been of immense help if this would have been a subject of teaching in schools and colleges but it's not so as of now. You can take help of experts and experienced people in this field which is not difficult to find. Yours truly is one such person having lived and experienced my financial journey and now trying to help people.

The first part is to save enough during your working years and invest the savings wisely. 
Don't wait until after you have retired to deal with changes to your financial circumstances. Many of these changes can be estimated and prepared for in advance. By drawing up a budget for your expected income and spending as early as possible you will give yourself a much greater sense of control over your situation. 
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You can always revise your budget later to reflect any areas where your estimates were wrong.If your budget reveals a gap between your spending and your income, then you need to look for ways to increase your income, cut your spending, or both.
Your budget of income and spending might identify areas where you are spending more than you might have expected, and where you think you could easily spend less.

If you haven't retired yet, you might still have time in the last few years before retirement to boost your pension income by increasing your contributions by as much as you can afford. The option can be especially attractive if your employer will partly or fully match your extra contributions.
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Another option might be to defer the date on which you start taking your pension income which can increase your income because your savings have longer to build up  and your pension will be payable for for a shorter period.
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The second part is about deriving income from these savings after you have retired.
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The basic requirement is self - evident: you should spend only that part of your investment returns that exceed the inflation rate. The single most important thing to understand is that you must reserve the real, inflation-adjusted value of your principal, and not just the nominal face value. So how do you do this ? One such instrument is equity backed mutual funds.
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Let's take a simplified example. Suppose you retire today with  Rs. 2 crores as your retirement savings. You place it in a bank fixed deposit. A year later, it is worth Rs. 2.14 crores. So you have earned Rs. 14 lakhs, which you can spend. But there is a twist here. Assuming a realistic inflation rate of 5%, if you want to preserve the real value of your principal, you must leave Rs. 2.10 crore in the bank. That leaves Rs. 4 lakh that you can withdraw to spend over an year, which is Rs. 33333 a month which is surely not enough for a middle class person. 
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The interesting thing is that this calculation does not change even when interest rates rise because inflation and interest track each other quite closely. But very few people in middle class will have a retirement corpus of Rs. 2 crore. So it can be very will imagined what will be the plight of those who have a corpus of say, Rs. 1 crore or 50 lakhs or even less.
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Further, there have been periods of time when the fixed income interest rate has been below the inflation rate. Moreover, income tax has to be paid whether you realize the returns or not. There can be a situation when the interest rate barely exceeds the inflation rate and the income tax on the interest effectively reduces the value of the money.
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The situation is quite different in equity linked mutual funds. Unlike deposits, they are high earning but volatile. In any given year, the returns could be high or low, but over 5 to 7 years or more, they comfortably exceed inflation by 6 to 7% or even more. The returns may fluctuate in individual years, and that's something which you have to put up with, but the threat of old age poverty does not exist. 
In such funds, one can comfortably withdraw 4% a year and still have a comfortable safety margin. On top of that, there is no income tax.

 As long as the period of investment is greater than  one year, returns from equity funds are completely tax free. This means that to have a given monthly expenditure through equity funds, you need just half the investment that you would make in deposits. An additional advantage in this case is, no matter how high your savings and expenditure, it's all tax free.
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People are gradually learning to appreciate  this idea and have started doing it.
They tend to be those who have used equity funds to their advantage as their savings vehicle anyway and are used to the idea of ignoring short term volatility in the interest of long term gains. However, the vast majority of Indian retirees are still wedded to  the mythical safety that deposits provide and end up facing tragic problems as they grow older. 
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Do you realize that there is no need for you to be one of them ?
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What one should do in today's scenario ?
1. Take help of experts for your financial  planning
2. Save 30% of your earning right from day one
3. Start planning for your retirement the day you start earning
4. Remember it's not only you but also your spouse which you need to consider for planning
5. Do not plan to depend upon your children or anybody for that matter for your post retirement needs because they have their own needs and in most cases they will not be in a position to accommodate you even if they have the intention to do so
6. Follow 100 minus age allocation rule which is a rule of thumb developed over the years in the attempt to provide guidance for equity and debt allocation decisions.
a) Subtract your current age from 100 and  the resulting number is the percentage that you must allocate to equities and remaining to the debt asset class. This means that if your current age is 30 years, you should put in 70% in equities while 30% should go to debt.
b) As the age increases the allocation to equities keep declining, reducing volatility and risk of the portfolio.
c) This rule might be a good starting point, but it is not aligned with the financial goals which are the actual purpose of creating a financial portfolio and building a corpus.
7. Always have a diversified portfolio
8. And above all life insurance has to be the first instrument when you get your first pay cheque
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Wishing you all lots of financial planning, real planning...
God bless !



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Art of managing retirement corpus...

Hello,


Financial planning and the art of managing our post retirement corpus is a fascinating topic to me and I am going to dwell upon it in my today's blog.
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Retirement is the act of  retiring or of leaving one's job, career or occupation permanently, usually because of age or early retirement because of critical illness and/or disability.  It's not an event but a long phase in your life that can last up to three to four decades  Your financial situation will certainly undergo a sea change when you retire. Your income is likely to fall and spending patterns often change as you grow older, for example you have paid all the loans etc which you might have taken for buying a house, child's education, child's marriage etc.
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During those decades, your corpus will be subjected to inflation which, in turn, will adversely affect  the value of your savings. If your savings do not give you enough return, you are going to run out of them within your lifetime and left high and dry on the financial front . 
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But there are ways and means to prevent this from happening. It would have been of immense help if this would have been a subject of teaching in schools and colleges but it's not so as of now. You can take help of experts and experienced people in this field which is not difficult to find. Yours truly is one such person having lived and experienced my financial journey and now trying to help people.

The first part is to save enough during your working years and invest the savings wisely. 
Don't wait until after you have retired to deal with changes to your financial circumstances. Many of these changes can be estimated and prepared for in advance. By drawing up a budget for your expected income and spending as early as possible you will give yourself a much greater sense of control over your situation. 
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You can always revise your budget later to reflect any areas where your estimates were wrong.If your budget reveals a gap between your spending and your income, then you need to look for ways to increase your income, cut your spending, or both.
Your budget of income and spending might identify areas where you are spending more than you might have expected, and where you think you could easily spend less.

If you haven't retired yet, you might still have time in the last few years before retirement to boost your pension income by increasing your contributions by as much as you can afford. The option can be especially attractive if your employer will partly or fully match your extra contributions.
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Another option might be to defer the date on which you start taking your pension income which can increase your income because your savings have longer to build up  and your pension will be payable for for a shorter period.
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The second part is about deriving income from these savings after you have retired.
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The basic requirement is self - evident: you should spend only that part of your investment returns that exceed the inflation rate. The single most important thing to understand is that you must reserve the real, inflation-adjusted value of your principal, and not just the nominal face value. So how do you do this ? One such instrument is equity backed mutual funds.
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Let's take a simplified example. Suppose you retire today with  Rs. 2 crores as your retirement savings. You place it in a bank fixed deposit. A year later, it is worth Rs. 2.14 crores. So you have earned Rs. 14 lakhs, which you can spend. But there is a twist here. Assuming a realistic inflation rate of 5%, if you want to preserve the real value of your principal, you must leave Rs. 2.10 crore in the bank. That leaves Rs. 4 lakh that you can withdraw to spend over an year, which is Rs. 33333 a month which is surely not enough for a middle class person. 
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The interesting thing is that this calculation does not change even when interest rates rise because inflation and interest track each other quite closely. But very few people in middle class will have a retirement corpus of Rs. 2 crore. So it can be very will imagined what will be the plight of those who have a corpus of say, Rs. 1 crore or 50 lakhs or even less.
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Further, there have been periods of time when the fixed income interest rate has been below the inflation rate. Moreover, income tax has to be paid whether you realize the returns or not. There can be a situation when the interest rate barely exceeds the inflation rate and the income tax on the interest effectively reduces the value of the money.
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The situation is quite different in equity linked mutual funds. Unlike deposits, they are high earning but volatile. In any given year, the returns could be high or low, but over 5 to 7 years or more, they comfortably exceed inflation by 6 to 7% or even more. The returns may fluctuate in individual years, and that's something which you have to put up with, but the threat of old age poverty does not exist. 
In such funds, one can comfortably withdraw 4% a year and still have a comfortable safety margin. On top of that, there is no income tax.

 As long as the period of investment is greater than  one year, returns from equity funds are completely tax free. This means that to have a given monthly expenditure through equity funds, you need just half the investment that you would make in deposits. An additional advantage in this case is, no matter how high your savings and expenditure, it's all tax free.
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People are gradually learning to appreciate  this idea and have started doing it.
They tend to be those who have used equity funds to their advantage as their savings vehicle anyway and are used to the idea of ignoring short term volatility in the interest of long term gains. However, the vast majority of Indian retirees are still wedded to  the mythical safety that deposits provide and end up facing tragic problems as they grow older. 
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Do you realize that there is no need for you to be one of them ?
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What one should do in today's scenario ?
1. Take help of experts for your financial  planning
2. Save 30% of your earning right from day one
3. Start planning for your retirement the day you start earning
4. Remember it's not only you but also your spouse which you need to consider for planning
5. Do not plan to depend upon your children or anybody for that matter for your post retirement needs because they have their own needs and in most cases they will not be in a position to accommodate you even if they have the intention to do so
6. Follow 100 minus age allocation rule which is a rule of thumb developed over the years in the attempt to provide guidance for equity and debt allocation decisions.
a) Subtract your current age from 100 and  the resulting number is the percentage that you must allocate to equities and remaining to the debt asset class. This means that if your current age is 30 years, you should put in 70% in equities while 30% should go to debt.
b) As the age increases the allocation to equities keep declining, reducing volatility and risk of the portfolio.
c) This rule might be a good starting point, but it is not aligned with the financial goals which are the actual purpose of creating a financial portfolio and building a corpus.
7. Always have a diversified portfolio
8. And above all life insurance has to be the first instrument when you get your first pay cheque
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Wishing you all lots of financial planning, real planning...
God bless !



My blogs can be viewed on
http://familyisreal.com
kumarskumarblogspot.com
My blogs @ SK 1955 on FB
@skumar272010 on twitter