View retirement as a process, not an event


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Do not make common assumptions when planning for your post retirement phase. Give it some serious thought since expenses are not uniform over the years. They tend to dip before picking up again.

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View retirement as a process, not an event

  1. 1. View retirement as a process, not an eventDo not make common assumptions when planning for your post retirement phase. Give it someserious thought since expenses are not uniform over the years. They tend to dip before picking upagainAuthor : iFast Content TeamThe Washington Post just put up a very short video on retirement planning.The financial expert cited a basic thumb rule which was that a minimum 70-80% of currentincome will be required post retirement. Yet, she was of the opinion that for the averageAmerican, $1 million may not be sufficient as a retirement nest egg.Standard Life came up with some interesting research presented in a document titled Death ofRetirement. The report explained that a lifetime was considered as youth and then adulthoodfollowed by retirement. Retirement was thought of almost like a cliff top, a sudden and abruptend of active participation in life.That has changed.Increasing life expectancy and prosperity means we will now spend close to a third of our lifepost 65. We will be healthier, wealthier and have the freedom to define our own direction. A lotof retirees’ future plans are not to wind down, but a time to invest in relationships that mayhave been neglected, develop new skills, travel, volunteer, start a business or continue to workbut on their terms. Achieving these ambitions whilst meeting their financial commitmentsresults in a complex set of financial challenges.A piece in Citywire Money titled the Retirement Smile, deals with one of the biggestmisconceptions in retirement which is that one’s expenses need not fall. Even if they do, theyare not uniformly distributed throughout retirement (see image below - Retirement Smile).With people living longer, their income has to cover the increasing costs of long-term care andhealthcare, which means that people have higher income needs at the back end of their lives.When you look at the increased expenditure and take inflation into account, it can be quiteunnerving.
  2. 2. Retirement SmileThe light blue line shows the income people expect to need in retirement and the darker blue lineshows the actual needs in retirement.1) Don’t treat retirement as an event, rather it’s a process.2) Move away from the narrow concept of pensions, towards lifetime savings.3) Start saving from an early point in your working life. It is never too late to begin.4) Do some serious financial planning to figure out your approach to retirement. Your planningmust encompass much more than simply selecting a financial product.5) There is nothing wrong with seeking the advice of a financial planner or advisor. You neednot follow the advice but it will give you some indication on how to move ahead.In Dont fool yourself about retirement, we put forth various suggestions given by HSBCsFuture of Retirement programme.Use equity to plan for retirement. It provides growth and beats inflation. With over 3,500 schemesfrom 41 asset management companies and 47 banks on our platform, we give you the convenienceof buying and selling mutual funds online. Click here to see the numerous benefits we offerinvestors at Fundsupermart.comHeres why you should consider investing in mutual funds.To buy and sell mutual funds online, click here.
  3. 3. Disclaimer: iFAST and/or its content and research team’s licensed representatives may own or have positions in the mutual fundsof any of the Asset Management Company mentioned or referred to in the article, and may from time to time add or dispose of, or bematerially interested in any such. This article is not to be construed as an offer or solicitation for the subscription, purchase or saleof any mutual fund. No investment decision should be taken without first viewing a mutual funds scheme information documentincluding statement of additional information. Any advice herein is made on a general basis and does not take into account thespecific investment objectives of the specific person or group of persons. Investors should seek for professional investment, tax, andlegal advice before making an investment or any other decision. Past performance and any forecast is not necessarily indicative ofthe future or likely performance of the mutual fund. The value of mutual funds and the income from them may fall as well as rise.Opinions expressed herein are subject to change without notice. Please read our disclaimer on the website. Please read ourdisclaimer in the website. Risk Factors: Mutual funds, like securities investments, are subject to market risks and there is noguarantee against loss in the Scheme or that the Scheme’s objectives will be achieved. As with any investment in securities, the NAVof the Units issued under the Scheme can go up or down depending on various factors and forces affecting capital markets. Pastperformance of the Sponsor/the AMC/the Mutual Fund does not indicate the future performance of the Scheme. The name of theScheme does not in any manner indicate the quality of the Scheme, its future prospects or returns. Please read the Statement ofAdditional Information and Scheme Information Document carefully before investing.