Retirement Planning


Due to better healthcare and personal-care on one hand and improving standard of living on the other, people are getting healthier and living longer.  In the sixties the lifespan of an average Indian was only 42 years.  Now it has gone to 70 years. It would not be uncommon for people to easily live up to 85 years in the near future.

Moreover, inflation is the “silent killer”. It reduces the buying power of money and the return on your investments. Traditional retirement investments may not beat the draining power of inflation. While they are certainly necessary, they may not be sufficient.

88% of India’s workforce is not covered under any formal post retirement plan. There is a near total absence of a formal social security system unlike advanced countries. Hence, if you do not start preparing for a relevant retirement plan you may land up in “Old Age Poverty”.

Are fixed return instruments an answer to retirement plan?

By investing only in fixed return bearing instruments, you could be taking a bigger risk in life. Fixed deposits and other debt oriented instruments are relatively safer than equities. However, in India the rate of inflation is quite high. Therefore, the fixed returns based debt instruments while preserving the current value of money could fall short of meeting one’s retirement corpus. Hence, by wanting to be safe today, perhaps one is taking a bigger risk in life.

Most retirement funds are debt oriented funds which may not have the power to beat inflation. Traditional retirement investments invest in debt paper. Hence, their ability to beat inflation in the long run is limited. Therefore, there is an urgent need to invest in equities in order to beat the draining impact that inflation has on the value of our money.

Asset allocation is the key to retirement planning.

As people age, their asset allocation has to undergo change. When they are young they need to accumulate wealth because they have “time” on hand. “Equities” is the wealth creation asset class. However, it yields returns in the long-term. Therefore, time is an essential “ingredient”.

To grow one’s wealth it is always better to START EARLY and SAVE REGULARLY.

Once an investor retires he / she needs a regular flow of money to fund his / her expenses. While salary stops post retirement, annuities and pension form a major part of his / her regular cash flow.  Our Retirement Plan is a product with an objective to provide the investor with a regular monthly cash flow via Systematic Withdrawal Plan (SWP) after he / she turns 60.

Hence to avoid falling in to the “Old Age Poverty” trap, it is advisable to start your retirement planning with SenSage.

Retirement Corpus Calculator