Sadly or happily I get recognized at some public functions or even public places. And people ask me many questions – largely related to the equity markets, mutual funds or the toughest of them all, Retirement planning.
The toughest question ever is ‘I have Rs. 4 crores, do you think I can retire?’ – just change that figure to X and I must have been asked about 1000 times, and I have to think of amazingly inventive ways to give a non- answer.
Here is an honest attempt to answer the question. Rather it is an attempt to say why I cannot answer the question.
Simply because I need to ask you many many more questions, some of which are:
What is your name and email address? I cannot over 3 minutes give you an answer – how much so ever you may want it.
What is your current income and when is it likely to stop? Honestly is this an accurate answer?
What is your current expenditure, what is the inflation rate APPLICABLE to you?
If you do not know the inflation applicable to you , is it because you do not know your current expenditure?
How will your expenditure change when you retire? Really? Have you spoken to your spouse?
Do you have any sensible pension plan? Do you know that annuities in India are at 6% p.a. and that the income is taxable?
Are you likely to get some inheritances? Is there some way you can put a date to that…or should I ignore it?
Will you downsize at say age 70 years? Will you want to shift to a cooler /warmer / drier place? Have you provided for that?
What are the assets that you have?
Do you realize that your so called assets like a Road bike, Golf kit, Paintings, are nice – but to me they have NO commercial value.
Do you have any other sources of pension? how trustworthy and how indexed?
Fine. Once you reply to these questions. We can have a 3 hour discussion along with your wife. And I need a laptop, a white board, and one marker pen. And 3 dusters.
We are going to erase far more than what we are going to write.
And I will tell you why the pension calculators are excellent guides, but just not sufficient for you to plan.
Go and play Golf.
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