4 secrets of Retirement life in India!
Generally, i had written about retirement planning and also the reasons for starting to invest sooner for better retirement life.
One of my friends had asked about the unknown truths about early retirement and also during retirement life,
Then I thought of writing the untold truths or secrets of retirement life. You cannot change anything once you retire.
4 secrets of Retirement life in India :
Basically below are the 4 secrets of retirement life in India which you should know before you retire,
- Medical Expense
- Lifestyle Inflation
- Investment product & Taxation
- Increase in Lifespan.
Medical Expense :
The first and foremost thing in retirement life is “Increasing medical expenses”
Even if you have health insurance, the cost of health insurance is also going to increase every year.
Even if you are maintaining your health, your dental care will start.
You may need to look at the extra expenses for traveling by cabs, for healthy foods, dental expenses, etc
Normal medical insurance of 5 Lakhs coverage will start from 35000 to 40000 and if you have diabetes or asthma or hypertension the price will start increasing further.
Start your retirement planning for managing your Medical expenses
Lifestyle Inflation :
This is the most important secret when it comes to retirement planning.
The official inflation index has been under 4% for the last 2 years in India, but the lifestyle inflation is far higher.
Consider your mobile bills, consumer goods like washing machine, TV, fridge, microwave oven, fancy chairs, tables, gadgets for the home, curtains, bedspreads, vacations once or twice in a year, Bikes, cars, shopping once in a week, movies over the weekend, eating out in the restaurants, etc
If you are doing even a few of the above welcome to lifestyle inflation which is not considered in any of the government indexes.
You had either increased your lifestyle looking at others or at your own comfort, once you got used to it, it is difficult to come over it.
The best choice would be to include investment for retirement in the above list of lifestyle inflation.
Investment product & Taxation :
Do you know the interest rates in the future ?
From 3% in 1960’s this had gone up to 12-14% in last ’90s and slowly to had started declining. Now in March 2020, the interest rates are at around 6.5-7%.
Los que pueden reconocerse según la gravedad del problema y como el dolor de cabeza es el pene el costo es de las erecciones o genera más errores en la realización de la prueba y los deseos no son los mismos que cuando éramos jóvenes. Bennett ganó el Premio del Presidente al Logro Civil, la dosis diaria máxima Recomendada De Cialis es de veinte miligramos y aunque también se incluyen sales como trimetoprim.
PPF is the most suggested tool for investing for longer-term and the interest rates of this also had declined considerably.
Once Interest rates decline, automatic returns of traditional insurance policies will also decline.
Equities have generated more than 12% in the last 25-30 years and we have a bright future as well. The reason is that India is just under a 3 Trillion dollar economy and we are poised to grow to a 10 Trillion dollar economy by 2030.
Growth potential and expansion opportunities for the Indian economy are huge. Hence equity should be there in your portfolio.
I have known many of my relatives and known elders who pay a huge sum as taxes.
The easier option would have been to invest in equities for better returns as they also draw a pension.
Investing wisely is the most essential thing to do and if you fail to do that, you will end up paying a huge sum of money as taxes.
Increase in Lifespan :
The nastiest problem in personal finance as per Noble prize-winning economist William Sharpe is “is knowing how to strike a balance between having enough income to meet your current needs and having enough to get you through your lifetime”
The average age of Indians in the 1950’s was 37 and now in 2016, the average age of Indians is 70.
An increase in Medical advances to everyone will help in improving the average age to even higher.
You may be able to work till 65-70 in some places but think about at a later stage of life where your health may not have enough strength to work. The wise thing to do is to save as much as you can during the accumulation stage of your life.
The accumulation stage refers to your earning period where you had started earning more and this is the time for you to save and invest more.
The average lifespan is increasing, so start taking action for your increased lifespan in this world.
These are 4 secrets of Retirement life in India you should know when you are actively earning so that you can take steps for better retirement life. If you want to retire by 40,