Retirement doesn’t mean the end of the world, it’s the beginning of a new life, the things you always wanted to do in your 20s, 30s, 40s or 50s can now be seen and pursued. Can help, can help some NGOs, spend time with their children/grandchildren etc.

But before we go on that journey, we have to make sure that the following are well taken care of:

Adequate medical insurance: One of the major reasons that can lead to lack of funds could be due to hospitalization of self or spouse. Covering yourself adequately will help avoid this trouble. Medical inflation is almost twice the normal inflation, for this it is very important to plan well as our retired life can be up to 30 to 40 years.

Prepare your will: We like to push this work for another day, most think it is a complicated task but it is not that complicated if you actually sit down to write your will, online format on various website are available to help you make your will. There are even professional solicitors who help you to do this job very effectively.

Fulfill all your obligations: Make sure there is no pending home loan, car loan, personal loan or child education loan, this will help you lead a stress free retired life.

Create an emergency fund: Always keep a good amount available to you at all times, be it flexi deposits with banks, mutual funds, liquid funds etc. This is important not only for retirees but for everyone responsible for running the household. .

Regular flow of money: Since the regular flow of income (salary/business income) stops after retirement, we need to ensure that the investments we make provide a regular uninterrupted amount for the years to come. This can be done by investing in Senior Citizen Savings Scheme, Fixed Deposit, Systematic Withdrawal Scheme in Mutual Funds, Post Office Monthly Income Scheme etc.

Ensuring that the corpus grows faster than inflation: One fundamental aspect that we tend to forget is to ensure that our corpus keeps pace with inflation. As we invest our money in fixed instruments and enjoy interest from them, the challenge comes when the instrument matures, inflation eats up the corpus and after that the interest rate can go down. This only gets worse as the years go by. To beat inflation whether we want to or not, we need to invest a small portion of our money in equity/hybrid funds and ensure that we do not eat into our capital. Though we all think equity investment is risky but the bigger risk is inflation over the years. A gradual and systematic approach to equities helps beat inflation that can turn its ugly head over the years.

Views are personal: The author is Rahul Khatri of Param Investment Mutual Fund Services

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