Securing your retirement income

Securing your retirement income

Setting up a predictable post-retirement income stream is no cakewalk. We give you a roadmap

If you thought that getting to a good-sized retirement corpus by the time you turned 60 was tough, here’s further bad news. With interest rates plunging, setting up a predictable income stream to see you through retired life is not a cakewalk either.

Given that most of us, whether in the government or in the private sector, no longer receive an inflation-indexed pension from our employer, it is wholly up to us to invest our retirement benefits and the wealth we have created in our working years smartly enough to take care of our living expenses post-retirement. A Sample illustration enclosed for understanding the concepts. Part 1 is the assumptions.

  • A monthly annuity will increase every month due to the effect of inflation. For simplicity, the amount shown above under
    a monthly annuity is the monthly average of total annuity payments received during the year.
  • The Annuity is received on the 1st day of each month starting the 1st month.
    *Returns are not guaranteed. The above is for illustration purposes only.

    Consider the true costs of retirement and be honest about the following:

    – What kind of lifestyle you want
    – Your travel plans
    – Your business goals
    – Whether you’re planning on helping your children or grandchildren with expenses

    Draft a retirement budget that’s realistic and assess whether you need to make sacrifices now to achieve your future financial goals.
    If there was no inflation in the world then the two would look forward to a long and happy stretch of golden years. But no, that will not happen. Prices will rise and the money will not be enough. They’ll start digging into their capital. They may not even realise it for a few years because while the nominal value of the savings will be maintained or even grow a bit, the real inflation-adjusted value (purchasing power) wll keep declining. In a decade or so, they will be looking at the biggest tragedy of retirement–old age poverty. This is not theory. Look around yourself, you will see any number of older people who are already facing this tragedy.


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