I wanted to say ‘mera pension ka pitara’ – but decided that hamper is a better word. Hamper meaning a box of gifts as well as ‘what I did to hamper my pension accumulation’ – in both usages!

Well I keep writing about pension – and have more or less been anti pension plan, EXCEPT if it is from a mutual fund. Of course I am for a pension strategy, but against buying ONE pension plan and believe that your old age has been taken care of.

I remember going to school once – and was very excited about what I was EXPECTING for lunch. So here I was whistling while picking up my lunch box, went with an extra spring in my step I went and opened the box – and found something else……….eeeeeeeeekkkkkkkk I shrieked. Of course the disappointment was there, but for a short while. I went home and ate what I was planning to have for lunch. Disappointment time frame? 4 hours? Learning? Patience.

However when you are 58 and open your ‘Pension hamper’ and you find that there is just not enough money to retire, what will you do? Ask your self this question, regularly.

What should be there in your pension box?

An equity bucket (2-3 funds), A balanced fund (2 schemes) , Income fund (1 scheme)

Rental property, PPF, PF,  Bank fixed deposits, Post office schemes – schedules, cash of course…..

Obviously as your age increases you shift from equities to debt – in a systematic manner.

Now if you do not do this, but instead you buy a pension plan for x amount, …and ‘hope’ that it performs according to YOUR EXPECTATIONS……well you are hoping….that HOPE is a good STRATEGY.

So immaterial of your age do not ‘buy’ a pension plan, create a pension hamper. Be careful what you put into it. I know one person who has created a ‘pension travel plan’, ‘pension white goods plan’, ‘pension house buying/repair plan’…then your medical insurance plan, sadly in India we still do not have a long term care plan, ….so go out there and create it. It cannot be bought, HAS TO BE CREATED.



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  1. I know many who want to buy immediate annuity plans in their 50s! A fill it, shut it forget it attitude simply wont work.

    Many with retirement 15 years away are swayed by a 1 lakh pension per month schemes. If current expenses are 30 K a month, a 1 lakh pension will be inadequate in the second year of retirement at 8% inflation!

  2. What kind of rental income do you have in mind ? Residential or commercial ? In old age, would you be able to run after tenants, get repairs done etc ?

  3. Looking at articles like this in various places I think I am not doing enough planning and blindly investing. I dont invest with any target in my mind. I invest because I have surplus. I dont curb my spending but my spending is around 50% of my take home including house emi. I route almost entire surplus to around 6 funds which roughly gives 50:50 debt. Expenses if and when they come I decide how much I can afford and spend. I dont have kids education or my retirement in my thoughts. As long as I am investing based on the money I accumulate I can take decisions at that time. I am not sure how this non-goal oriented investing will serve me but my philosophy is money is money whether you keep it one basket or 10 baskets.

  4. Rentals scare me. We had a hell of a time getting our own house back in Baroda in 1972. And now that area is expensive, I see nightmares of endless litigation.

  5. I have my reservations about dependence on Rental property during old age. You surely cannot chase errant tenants and ensure maintainance of the rental property at 75.

  6. Rentals are not a scare if you do decent documentation. In Pune I found a manager who manages your property for a fee. Buy a house and give it to him – he charges the tenant brokerage, pays the rent to you and maintains it. He does decent documentation, deals with the police verification, and takes reasonable care.

    If you buy a property when you are 50 rent it out for 25 years, then sell it off. Alternatively give it on rent to your kids – they have a huge incentive to pay rent because they are going to inherit it when you are no more….all this works.

    at a stage when u think u cannot manage an asset convert it to a bank FD. Simplest asset.

  7. After 80 it will be better to follow Indian age old system of taking Sanyasashram . Whatever you do or have ,you wont have the energy to be able to hold on to it and everybody will be waiting for your departure . By the way, what will happen if you’ve lot of property and money but no energy left in old age ? Such is the way of life…

  8. Subra,

    You always prompted people not to invest in real estate. Why this change of heart?
    Interest income in India will never be a match to bank interest on the same amount. Only return will be the capital gains when you sell the property. Certainly not fit for pensioners.

    Better to build a home and enjoy the same when you still have your energy. Your children will enjoy the value gains.


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