Most people who talk to me are worried about 3-4 things in Retirement. Nobody seems to be worried about death – death is perhaps welcome once their ‘responsibilities’ are over.
What worries them about retirement:
a) Will we out live our corpus: apart from usage assets (assets that are held for usage, not appreciation or income) I guess a person needs say 30 times the annual expenses at the age of 60 – called the retirement age.
If you withdraw say 6% from the corpus and YOU DO NOT WITHDRAW from this corpus FOR any other purpose, you should not have any great worry about outliving your corpus – if you are lucky enough to die before 90 years. If you live to age 116, God bless you. Ask your GREAT GRANDSON to help you.
b) Will inflation make us compromise on our standard of living: Clearly depends on your current standard of living. If you eat out 3 times a week, keep a cook, 2 maids, 1 driver, and have a commitment to all branded items, well you surely have a worry. The cost of branded goods increase at a much much higher rate than normal inflation. Say inflation in unbranded goods is about 8% p.a. – branded could be as high as 20%p.a.
Either invest very heavily in equities now – and hope for a nice boom, or adjust to a lower standard of living. Remember ‘Santushti hi Sampathi hai’
c) Long Term Care and Insurance: If I am alive and need a lot of attention will I be able to afford treatment? If I live with dementia or alzheimers will there be an organisation which can ensure a day care and help me?
Solution: You can expect a product like this will be available soon. Hopefully. I am hoping to buy one!!
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