We just saw…part 1 of ‘should I retire at all’…now here are the hassles – or why I have been having these doubts! Here are the reasons:

Of course the most important question is “Will my corpus last 4 decades….for me and my wife to survive on”…

1. In India we have NO social security at all: If you exhaust your money, well bluntly, you are dead. Period. Not negotiable. Plain cold dead.

2. People who are dependent on Government or other pensions – God bless you if you think it will last till you last! The government will coolly stop the indexing or the pension itself! PSUs will be privatised (we are talking 3-4 decades, and anything can happen).

3. Our medical insurance is a farce BEYOND your age of 65: Most companies will not pay for regular expenses – and the hospitality industry’s pace is higher than inflation! Redefine health and pray.

4. If you have kept the money in safe, solid fixed deposits, inflation will kill your corpus before you die!!

5. If you think ‘Reverse Mortgage’ will save your day. Chill. You can do a R.M. only AFTER your age of 65. I would suggest please try RM only after the YOUNGER spouse turns 70 should you even THINK of RM. Remember the building has to be less than a particular age for the lender to be interested in the deal. To cut a long story short, do not rely on this …EXCEPT as a last resort….

6. Health care is expensive and worse, unpredictable: need I say more?

7. Living beyond a particular age you will need help of all kinds – changing curtains, changing bulbs, banking, cooking,….and this is damn damn expensive, and worse not available in most places.

8. Retirement, well technically is just an exercise in knowing how much you should withdraw. However with so many scams, meltdowns, frauds,…it is well nigh impossible to get the final answer right. Just too many variables for you to get the final answer right.

Now you know what I have been saying, right?

  1. I guess what you are saying is ‘practice attaining samadhi’. Or get the boon of ‘ichchha mrityu’. I do envy Bhishma. Shantanu indeed gave him a fantastic boon.

  2. So…is there a way out?
    I’m I doing right if I have gone through the whole exercise of Financial planning and retirement planning

    Another thought:
    btw, the same logic goes with life insurance…”Should I get an insurance at all?” with all the odds of claims settlement against my dependents, and insurance companies being hey-hey, is it worth getting insured?

  3. @Puneet,

    If you pay the insurance premium, there is a *possibility* that you pay out of pocket in case of claim rejection. Without paying the premium, there is a *guarantee* that you pay out of pocket.

    As of now, I have opted for insurance (both life and health), just to retain the finite-nonzero-possibility of claim settlement.

  4. @Sambaran,
    I agree. This is the exact reason I’m still insured(life + health). but at the same time not very confident about it.

    The key probably is to reduce dependency on insurance too much and focus on to enhance wealth and be self sustained thereafter. Look at it as mitigating the risk of insurance no-claim situation.

    Do I make sense?

  5. @Puneet, I could not have put my thoughts better than the way you did. I completely agree.
    Regarding handling medical costs at retirement, I have a radical but politically-incorrect, thought process. The day I feel comfortable about sharing it, I will blog.

  6. The moral of the story looks to me is that we have to take care of ourselves towards retirement in anticipation of the risks such as not getting government pension, no insurance for health coverage and inflation pressure on life style.

    A decade ago people were comfortable that pension and insurance would provide comfort during retirement. Thanks to our recent finance ministers who worked hard in widening our budget deficiet, welfare & health care budget gets pruned.

    The only saviour for the retirees is children. Hopefully they would be last resort for the parents.

  7. the children-parents dependence,while anathema to a lot of people is the thing that will keep families intact.the moment we have a social security style idea implemented in india,we can be sure,intergenerational trust will reduce.most black children in america today are born to single mothers.
    this doesnt mean one should be dependent on our children,but one should not be conditioned to think it is a horrible idea to ask them for help if needed.

  8. This is the reason I think the age old ‘Indian’ tradition of children taking care of thier elderly parents is such a good system. However, in this modern age, the chidren are selfish and are less inclined to take care of thier parents.

    Note: I am 42 yrs old and I am taking care of my father and I am happy to do so and so is my wife.

  9. if you want to be dependent on your KIDS have 3-4 kids – from a risk point of view that is necessary. My grandfather had 5 sons – one died in an accident, still there were 4 to depend on. My dad has one son, and God has ensured that my Dad and Mom can take care of themselves 🙂

  10. Boy, you have scared the daylights out of me. I had better do something. Financial planning for retirement . What do you suggest for this pancea.

  11. @venkatesh,
    the statement that children are more selfish today is a little too general.
    you only have to look at the environmentalists and social ‘welfare’ do gooders.they are all mainly younger folk.
    the real question is :why are children behaving this way. selfishness didnt suddenly increase in the world.

  12. @praveen I agree with you praveen, Additionally i think we should not expect that our kids would take care of us, they have their own life. if they do its a bonus, if not be happy that they are not depended on you 🙂

  13. @Venkatesh,
    I doubt whether old Indian tradition asks children to take care of parents. Taking care of parents is a recent-Indian-tradition.
    I remember vanprastha-ashram from Mahabharat/Puran-stories. Old people were supposed to go away from grihastha-ashram of grown up kids into vanprastha-ashram (sounds like an old-age-home concept) once they cross 50. The oldies also had to cut back fiercely on their lifestyle.
    Even more fierce austerity-measures were scheduled once one crossed 75. Vanprastha gave way to Sanyas-ashram. You had to move into jungles with almost zero physical comfort in sanyas-ashram.
    So I do not think real-old-Indian-traditions recommended physically-comfortable retirement. By moving to old-age-home concept, we may actually be returning to our traditions.
    Its a pity Mahabharat falls silent about the economics of maintaining those vanprastha-ashrams. Was it the king who financed the ashrams? The vanprastha folks were not supposed to earn anything. If I remember right, they had to spend most of their time thinking about god and spirituality. Blogging about financial matters was strict no-no (Subra take note).

  14. >>Blogging about financial matters was strict no-no (Subra take note).

    Just wanted to emphasize this.. 🙂
    I’m sure Subra is taking notes.

  15. I feel that parents have every right to ask for financial help from their children. Nothing to be ashamed of.

    I hate the ad of ‘hdfc life’ which says ‘sar utha ke jio’ or ‘retire with pride’.

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