This is not a ‘Retirement’ problem as much as it is an old-age problem. I have met and spoken on a one-to-one basis with very many people, but a few stand out in my memory. I met this 70-year-old childless couple who had run out of their total corpus, did not have a house, and didn’t know where the next meal would come from. They had `3 lakh - but had no clue how they could live say next 20 years?
I have even heard of a son selling off his parental house and leaving his parents stranded at the Airport where he went away with all the money.
Welcome, to the Dark side of Retirement. It is dark and opaque.
While most of the stories that you hear are about ‘Golden’ retirement, in a few cases, it is ‘Red’ Retirement. Whether you want it to be Golden or Red depends to a great extent on your preparedness for retirement. Money, of course, is important, but then so is being prepared mentally, and physically too. Financially speaking - very few retirees have a nice indexed pension.
For the others, they have to have enough financial management skills - to make their money last for say 35 years post-retirement. Not many people have enough money AND management skills. Survey after survey in the USA shows that a big part of the population has no clue about the financial management skills needed while in retirement.
We don’t have enough resources to do research in India, but the results are likely to be similar, if not worse. Now throw in 8% inflation, and 7% p.a. return in bank deposits (subject to tax) - means further bad news!
Many people are so poorly prepared for a retirement that they Assume that they will surely get an extension! Even those who know that they have to retire at 58, are not so well prepared. Many of the Retirees could be heading for depression, and this again is not addressed enough in India.
What can you do to avoid being a victim?
First of all, sit with your spouse and plan for your Retirement. This might mean preparing a will and other documents needed to handle the great departure which we will all have one day. It might mean teaching your spouse some basic, management skills regarding money, security, etc. Increase your social life - out of the workplace friends - this will make it easier post-retirement.
Second, create a school and college group - remember you will be the same age! This will help you decide on where to live in your old age, plan vacations etc. So the missing social action after you have left office is taken care of by this group. Focus on your physical fitness - join a gym and say swimming. You could be doing cycling, running, swimming and going to the gym. This could mean you are busy for 2 hours doing all this, as well as meeting people much younger than you, and that itself could keep you away from illness and disease. Start your Retirement with a Prayer. It helps.
PV Subramanyam
writes at www.subramoney.com and has authored the best seller ‘Retire Rich - Invest C 40 a day’