Retirement and Unemployment

You are 55 and earning Rs. 1.4 crores CTC. All this has gone to your lifestyle. Nice big house, 2 cars, expensive servants, foreign trips for the family. In short, Majja ni life.

You meet a financial planner who is stunned to see that you have a net worth not very far from your CTC. The 5 ulips you bought are worth nothing. The Savings Advantage Plan that you bought as a ‘good investment’ is giving you 3% cagr. In short you have been had.

Suddenly your HR calls you and says you are being downsized. You are stunned, what to do? Well look at the following…

  1. Downsize your home immediately: If you have 2 houses shift to the smaller house and give your bigger house on rent or put it up for sale. The cash from that house sale can help. Given your lifestyle you may have got a lot of unnecessary ‘stuff’ at home – see what can be converted to cash. Seriously every drop will add up.
  2. Find a good financial adviser and evaluate exactly where you stand. You may be too emotional to do it alone.
  3. Enlist support of all friends – somebody who has a spare house, to find you a new job, explore consultancy options,…whatever
  4. Consider relocation: Nasik and Baroda are far cheaper than Mumbai and even Pune.
  5. Downsize life style: If you were spending Rs. 12000 for a meal of 4 travelling 35km in your Audi, learn to walk or reduce the running cost of your car.
  6. Save aggressively from today itself: Never mind, you are not running a popularity contest with your wife and kids. Be factual and save aggressively from today itself.
  7. Make sure that your money works harder than what it is doing currently.
  8. Remember you can consider reverse mortgage only at your age of 73 years
  9. Take an immediate annuity – so that some of your bank fixed deposit and other shit can be more gainfully invested.

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5 Responses to “Retirement and Unemployment”

  1. The problem I see, when there is downsiing most likely its because of recession.. So it wont be easy to sell house and stuff, because prices would be depressed. And imagine trying to convince someone to start to aggressively invest when everyone is losing money.

    Anyways, the number of people in my circle who have lost their job and are not able to find another is alarming.

  2. I am sorry Subra but a person with the above profile will not read your blog..

  3. Umang,

    What makes you think that someone earning 1.4cr doesn’t read his blog?

    Rather i

  4. Hi Subra,

    good post..can you elaborate on reverse mortgage being an option only at the age of 73? Is it to say that it doesn’t make sense before that or not feasible to do it earlier?
    Assuming that it’s the former.

  5. These seem to some really nice tips to tackle the problem. Thanks for sharing.

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