Plan in a way so that you can enjoy retirement without fretting about finances
My friends and I are now in the smug 50s. We began with very simple careers and modest incomes. But we were the generation that was at the right place at the right time. When the economy opened up in 1991, we were the qualified, skilled and enthusiastic youth that grabbed the opportunities with both hands. A combination of good old saving habits and rising income has left us with assets we never thought we would accumulate in our lifetime. As the dreaded "R" word is now looming large, we are taking stock of how our life will be when we are the end of the job-life as we know it.
Many of us do not even believe we will retire. There is the confidence that we will continue to find work and be paid for our "expertise". In our mind, there is the nice possibility of working a few hours, or a few days in a month and earning a decent amount for as long as we like. The problem in this assumption is that the younger generation has squarely outsmarted us and will continue to do so. The managers who we hope will engage us, are likely to have had better schooling, larger global exposure, finer social skills, and higher expectations for performance. They are the ones we sent to the best schools in the world and brought up with the highest indulgence and positivity. It is time we defined what our expertise would be, and how it would get priced in a competitive post-retirement world. If we see ourselves as "mentors" it is time we enrolled into programs that certify these skills and begin to read, write, blog and publish to establish our credentials.
We are very proud of our networks. A large number of our friends have done well for themselves too, reaching very enviably powerful positions in the career. We are happy to be in their circles and think that this might help immensely when we retire. May be not. The CFO of the billion dollar company derives his power from the treasury he manages. Once he gives up that job, the power quotient simply vanishes. So is the HR head who has the power to recruit, promote or fire management trainees to CXOs in his conglomerate. Once he retires, people will soon figure out that he is now in the queue for jobs. Retired bankers have been aghast at the nonchalance of erstwhile colleagues, who will now not even return missed calls. While it may provide immense scope for a good life of laughter and fun, the buddy network might not come of use for a post-retirement career. Adding new young ones to the list is not easy. Many retirees find they are "being avoided" while bragging about their glorious past.
Not everything is bleak, though. There is the nice pile of assets that should serve our needs very well, and some more. With zero debt and peak income, the 50s is the time to give those assets the final push to even bigger size. It is also the time to rebalance and reallocate, when we still have the power of our job and income. It is time to ask whether that terrace flat in Navi Mumbai, or the bungalow in Gurgoan, will be useful. Will it fetch a decent rent (ask whether someone who can rent a luxurious house would have bought a property instead)? Would the child for whom it was bought bother to take a few days' leave to come over to get the stamp and registration tasks done? Assets are all good as long as they serve a purpose. A farm house that takes more to maintain and enjoys 20% annual occupancy is a dead asset in retirement, when there are no fancy parties to throw for building professional networks. A small one-bedroom in the heart of the city might be low on prestige value, but earn a steady inflation-adjusted rental. Take charge of those assets. List them, evaluate their use after your retirement, and make sure they will all work for you. Each rupee invested in your earning life, should work for you in retirement.
Many of us are so bitten by the "giving" bug. We are eager to do something for the society and give back. But we need a plan to do that. If our assets generate adequate income and security, we can devote our retired lives to enjoyable charitable work. There are thousands of organisations run by spirited youth so short on time and resources. The job can be immensely satisfying and make a real difference to the society. Find the causes that are dear to you. Find out organisations you like to support. Check out how they are run and how they are funded. Begin your association even as you are working. Ensure that your networks, power and mentoring activities help the organisation. Build equity and add value. Go that extra mile when you still have the energy and your limbs have not weakened. Do not wake up after retirement to announce that you are now willing to help. Many retirees have been ripped off or handed a raw deal when they make their eagerness too well known. Create your giving strategy much before retirement, with the same smartness you bring to your job.
If there is one thing in common among the 50-somethings today, it is the strong desire to live, travel, work, and have all the fun after retirement. But getting there needs investment of both money and time, now in the 50s. If you dislike weak bones and lifestyle diseases, that modification to food, work and workout should be done now. It can't wait until you retire. Get to work on your second innings, before your power, networks and health begin to decline in value.
1.ICICI Prudential Tax Plan
2.Reliance Tax Saver (ELSS) Fund
3.HDFC TaxSaver
4.DSP BlackRock Tax Saver Fund
5.Religare Tax Plan
6.Franklin India TaxShield
7.Canara Robeco Equity Tax Saver
8.IDFC Tax Advantage (ELSS) Fund
9.Axis Tax Saver Fund
10.BNP Paribas Long Term Equity Fund
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