As human beings we are always influenced by social and cultural trends which influence the socio-economic structure and hence some concepts keep on evolving over time. Retirement is one such concept.

Retirement is a term that is often associated with a certain age but such a short-sighted approach does not bode well in today’s world. In the last few decades, there has been a major shift from pension paying jobs (government and PSU jobs) to non-pension paying jobs (private jobs) and from joint family to nuclear family and hence retirement should be viewed through a different lens . Add to this, increasing life expectancy and rising medical costs to take home the importance of the topic and the need for an individualized action plan.

In my view, the term retirement should be defined as a stage of life when one does not work for money. Such a phase may come early in life and also late in life, it is unique to each individual and hence it may require an individual approach to planning this phase of life.

There are three important questions to be asked on this topic:

• At what age a person wants to stop working for money or even if he works voluntarily and is not forced by circumstances
• What will be the estimated monthly expenses to maintain the lifestyle
• Are we on track to create a fund that ensures that we meet the above points?

For some jobs that have a fixed retirement age, the first point is easy to answer. Having said that, we know a lot of people who though have retired from their jobs, are forced to work in a different setup because the monetary requirements outweigh the income. On the other hand, there are many instances where people have earned enough money that they have complete control over how they are spending the rest of their lives.

The second point about lifestyle is more subjective in nature. Let me try to explain with an example. Imagine you’re retired and it’s Monday morning, you just finished your breakfast and now have free time until lunch. How will you spend the time till lunch?

• Will spend time on screen or do some interesting reading or do some household chores
• go to the club to spend time with friends
• Will go to charitable trust and give free service
• connect with my passion for art/music/literature

Your post-retirement lifestyle will have a big impact on how much your monthly expenses will be. Post-retirement lifestyle requires careful consideration, which will consequently prompt us to answer the second point about monthly spending.

Now the most important part, where are we in today, do we have any plan which can help us to secure a lifetime income at that stage of life where working for money should be an option and not a condition .

The corpus we want to build for tomorrow needs to be saved from today, this can lead to a fight between the present and the future. Spending makes today happy while saving makes tomorrow happy, so it’s a battle between present and future, both want to be happy but it’s a zero-sum game which means one can’t do both. Spending reduces saving which TOMORROW doesn’t like whereas not spending TODAY doesn’t like.

The job is to find the right balance between today and tomorrow and if we haven’t planned yet, that’s a wakeup call. We should start now or else we will run out of time and tomorrow will be today.

Views are personal: The author is Bhavesh Khaitan, a Nagpur-based mutual fund distributor

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