A retirement crisis could turn out to be the biggest headache in most of the countries, including India.
This has been voiced by many veterans earlier. Recently, an article by The Ken titled – Why more 40-somethings are becoming ‘unwilling retirees’ brings the spotlight back to this topic.
Gone are the days when one could think of retiring comfortably in their 60s. The retirement problem en-mass will show over the next decade.
Many factors are playing towards this phenomenon. Here are the key factors:
– Dynamic job markets resulting in uncertainty of staying in jobs due to redundancy of roles
– High salaries become an impediment to joining the next company if the skills you bring are replaceable by someone with lesser cost to a company
– High inflation & lifestyle expenses leading to insufficient savings for increasing years of living
– Rising costs of homes and cars which many finance through loans delay the building of an appropriate retirement corpus
– Subconsciously relying on children to take care of you after your retirement – dwindling possibilities with the challenges the next generation will face
But there is hope if we consciously make an effort to work towards financial freedom sooner rather than later. The FIRE (Financial Independence Retire Early) concept has become more critical now. Here is what we need to do:
– Put your retirement corpus as a top priority, over your children’s education/marriage or buying a fancy house/car. Remember, you will get loans for almost every big financial event but not for your retirement. Once your retirement corpus is secured, you can plan to work on other goals
– Get to know the right retirement corpus you need. Many people underestimate their retirement corpus by not accounting for the impact of inflation
– Hire an advisor to help you understand the funds needed for different goals and retirement corpus. The exercise will also help you prioritize your goals, the health of your current finances, understand if you are making sufficient savings & investing properly to be able to achieve your goals
– Constantly upskill yourself in different areas. The diversified skillset can increase your chances. The diversification concept in investments works here as well
– Do not consider your kids as your retirement corpus
The sooner you take the right steps toward your retirement planning, the more peaceful your future will be. Ignorance is no bliss in this case.
Originally posted on LinkedIn: www.linkedin.com/sumitduseja
Truemind Capital is a SEBI Registered Investment Management & Personal Finance Advisory platform. You can write to us at connect@truemindcapital.com or call us at 9999505324.
