Retirement Blues
1. Investing a large corpus at the time of retirement has NO demerits. One is simply investing the money one has. You have to do it carefully since it is a large amount of money – that's it.
2. One has to decide what percentage of your investments should be in safety (Debt or Fixed Income products) and how much into growth products (Equity MFs largely). And this should change with your life stage, liabilities left and your outlook to life going forward. Eg, I am literally 100% risk-on and quite comfortable with it.
3. Please get over the misnomer that Retirement means full risk-off. Please remember that you have at least 35 more years of great life to be lived. So why should active investing stop and passivity take on?
4. Everything compounds – debt, equity, MFs, bonds, and even your lowly savings bank compounds. Nothing great about compounding of DSOPF.
5. If you have put all your money in PF during your career and accumulated a large corpus, I would complement you on good financial discipline but also consider as a case of large missed opportunities…you could have had much more wealth with the same invested amount by also having a proportion of equity. Same is my feeling about the people who put all their retirement corpus into debt products – SCSS (Senior Citizen…), PO MIS, bank FDs, real estate and the like. We're consigning our life-time earnings to a period of negative growth after adjusting for inflation and tax, which is actually the way one should count one's earnings.
So, what is the way out?
Get you risk profiling done, see what are your financial goals coming up, make a well-diversified plan and stick to it with regular review. Any step missed out will make the process of your wealth creation sub-optimal.
Make money using our Bank Nifty Option tips for tomorrow and stop worrying about your retirement as you will never like to retire from a money-making venture for the life.
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