Have you adequately secured your retired life?

A dear uncle of mine, who retired a couple of years back, recently checked with me if there were any specific steps to be taken post retirement towards financial wellness. That got me thinking, is there anything which we do differently because we are retired, except of course, not earning an active income? The answer is not a simple yes or no. Some things listed below can be done irrespective of whether you are already a retiree or not, while others are specific to retirees. Following are my thoughts on what your approach should be towards financial planning post retirement.

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Start with your current position: To start planning for your future you need to know where you stand currently. Start by listing all your assets and liabilities. Take time to accurately list down your monthly and annual expenses. Factor in one-time expense like the wedding of a child or recurring expenses like vacations. List down your goals and the implications they have on your finances. Start with living a comfortable retired life and work your way down to the long cherished dreams of vacations, etc. Once this is done, you will have a clear road map on finances required at various stages in life and will be able to plan your investments accordingly.

Don’t shy away from equity just because you are retired: Retirement is not a short phase, it could encompass almost one-third of your life. It could last even 20 years and sometimes, even more. Equity has a history of giving stable and superior returns over long periods of 8 to 10 years. I am not asking you to experiment at this juncture in your life. There are relatively safe products to invest in equity. Even assigning a portion of your corpus can do wonders to your returns. Considering we are talking about investing money which you have really sweated out to earn during you entire working life, hire a good professional and understand their reasons for recommending products. If they demand a fee for their advice, believe me, it may be well worth it.

Ensure you have sufficient health insurance cover: This is the phase where expenditure on health related issues is often at its highest. It is extremely important to have an adequate health cover, hence, if you have a health insurance cover of your own, do continue it even if your premium has gone up considerably owing to increase in age. If you don’t have a health cover, you may find it difficult to get one now, especially if you have been diagnosed with one of the abundantly common lifestyle diseases like hypertension and diabetes.

If you are able to get a cover, but the high cost of the same is a deterrent, consider a top up cover where you are covered over and above a deductible. I have written extensively on this and you can find links pertaining to the same at the end of this article. If you have children who have group cover with their employers where they have the option of adding you, please ensure that they do, even if it means you bear the premium for the same. The group covers come with huge benefits where pre-existing diseases are covered from day one.

Put away sufficient emergency corpus in investments which are liquid: Even if you have adequate health insurance, you will need to have a sizeable emergency corpus. Various situations may arise requiring you to pay upfront. The hospital were you decide to go in for the procedure may not be covered for cashless facility with your insurer in which case you will need to pay and claim later. In an emergency, the hospital may ask you for a refundable deposit before they start providing medical attention. Worse, your particular ailment or line of treatment may not be covered under insurance at all.

While you will have some part of your investments in long term products without an easy exit route, it is important to have some funds which are earmarked for emergency.

Make a will: Contrary to popular belief, making a will has nothing to do with retirement. We read about accidents almost on a daily basis in newspapers but refuse to believe that the same could happen to us. It is important to list your assets and how you would like them distributed after you pass away. After all, your intention is not leave a feuding family. Also ensure you change your nomination as per your will, don’t leave your assets to one child while you have nominated the other.

Don’t worry! The process of making a will is very simple. You have a lot of assistance available even online today. Registering a will is desirable. You can also change your will any number of times during the course of your life time without much trouble.

Some aspects not directly related to your finances

Spend on experiences: Like most people, you may not have been able to indulge in experiences which you would have always intended to, due to constraints of time or finances. Make a list of all the things you always wanted to do and plan for them. The time you spend in planning and executing them will keep you occupied and joyous for a long time. Don’t forget to photograph these moments so you can refresh your memory and relive them every now and then.

Invest time and effort in keeping body and mind healthy: While sounding very clichéd, prevention is better than cure. Ensure you spend at least half an hour each day on keeping your body and mind fit. Join the yoga classes nearby, go for a walk, do whatever you enjoy, but be consistent and half your troubles will take the next route out of you!

Join clubs where you meet people at the same stage of life: Join the laughter club near your place or the temple committee, any place where you meet people who are in the same stage of life. Actively participate in organizing social outings. This can cheer you up, especially when you realize that you are not alone and others around you face the same issues as you. It is strangely heartening to know that others face them too.

Try to keep abreast with technology: Your grandchild will be only too happy to demonstrate his/her knowledge to you. Kids can be very patient. If you don’t have a grandchild yet, look for some kid in the family or neighborhood. Technology can be liberating. I have personally witnessed how simple stuff like checking your whatsapp, bonding with your extended family & checking the latest news flash on your phone can keep a person involved and connected.

Links to article mentioned above

 

http://finwise.in/blog/?p=412