FINVISION Financial prep guide: 5-point Retirement readiness checklist & 4-Red flags to avoid

New Delhi (India), February 28: Retirement planning can seem like an elusive financial goal for most of our working lives. However, as we approach our 50s, it suddenly becomes a reality. The burning question on everyone’s mind is, “How should I prepare for my retirement?” At Finvision, they understand the importance of this question for the fraternity and are here to help you navigate your retirement journey successfully.

Preparing for Retirement: A Checklist

Evaluate your Assets: If the house you live in is worth ₹2 crore, your financial assets are worth ₹50 lakh, and you are retiring with only/ limited and/or no pension, you may be at risk. Your biggest asset will earn no income, and you will leave it behind for your heirs. Prepare for a frugal retirement or for working beyond your retirement age unless you recast your assets to work for you.

Classify Your Assets: Divide your assets into three categories: those for your own use during retirement, those designated for heirs, and those intended for charitable giving. Gone are the days of leaving everything for your children. Be strategic in your approach and prioritise your needs.

Develop an Investment plan: For the assets you plan to use during retirement, create a strategy that balances growth and income. Invest wisely to ensure you won’t outlive your resources. Consider using financial instruments like mutual funds to manage these assets efficiently.

Prioritize Estate planning: Assets earmarked for your heirs should be included in a well-structured will, preferably registered, also have nominations in place for all your investments. This ensures a smooth transition of assets and minimises potential conflicts among beneficiaries. 

Embrace philanthropy: The charity bucket is often overlooked but holds immense potential to make a difference. Consider donating not only assets but also belongings you’ve accumulated. Do support the causes that resonate with you and make a positive impact during your lifetime.

Red Flags to Avoid:

1. Avoid concentratedasset allocation: Make sure your assets are not concentrated in illiquid and sub-optimal assets like expensive jewellery, vehicles, real-estate and assets like house you live in.

2. Avoid making lofty generalisations: ‘I can’t put the principal and retirement corpus at risk and will learn to live with interest income alone’ is an insanely conservative approach arising from fear of loss. You are allocating `₹100 to your heirs and using just ₹6 for yourself. Be kind to yourself: If you run out of money and have no income, a reverse mortgage of your house could be an option. Also, ‘My children will take care of my emergencies’ is an assumption you should be careful about. They may have different priorities. Don’t make the mistake of considering your children and their wealth as your assets. These are available purely at your children’s discretion.

3. Do not risk your capital: At near retirement, many feel extraordinarily rich calculating their retirement benefits and the accumulated DSOP/ Provident Fund or the estimate of their assets. They make the mistake of talking about their wealth. Soon enough, some batchmate wants you to partner in his business; the nephew wants you to guarantee his bank loan; the daughter wants a loan for upgrading her home; the cousin wants a loan for his daughter’s wedding. You get the drift. A lot of money will soon become a lot less if you allocate it to others thoughtlessly. Retirement is not the time to give a loan or take one. What you will give away in bequest or charity must be yours alone to decide.

4. Avoid planning for lifestyle maintenance: Unless you have saved too little or have invested too conservatively, you should have a comfortable level of savings, invested and growing well, to take care of yourself. If you can’t, not to worry, Start today. For your retirement life from hereon, how well you invest the accumulated corpus is more critical than the amount of corpus you have accumulated. Make sure to put considerable thought into this aspect.

Conclusion: At Finvision Financial Services, they understand that retirement planning can be daunting, but it’s a crucial step in securing your financial future. The expert team is here to assist you every step of the way, from assessing your assets to creating a solid ‘Goal plan’. With the right strategy, you can retire with confidence and enjoy the fruits of your labour. Don’t wait, start planning your retirement today!

Founder & CEO:

Col Sandeep Mahalwar (retd.), Founder & CEO of Finvision Financial Services. An Ex NDA and Staff college qualified officer with MSc, MBA(Finance) and an IIM Ahmedabad Alumni. Has an experience of over two decades of experience in Financial Planning and Investment Management? Held key and regular finance-related appointments including Joint Director Financial Planning & Budgeting at the Ministry of Defence (Army), managing more than ₹1Lakh Crores each year for three consecutive years. Commanded a unit and was directing staff and visiting faculty at a Premier National Institute preparing mid-level officers for financial planning appointments to include an introduction to Investment management.

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