STRATEGIES TO HELP YOU MAINTAIN YOUR LIFESTYLE POST RETIREMENT
Most of us have a tendency to keep putting off things on the things we want ,like pursuing a hobby,spending more time with loved ones,taking up a sport,doing philanthrophy,social work etc.
These things usually tend to get pushed towards retirement planning
A few things to keep in mind from a retirement planning point of view are
1) Start Early:The earlier one starts the better.Most people tend to think of it around early or middle fifties.If one does it earlier one has a possibility of retiring early and pursuing ones passions.
2) Every Day is a holiday:Since everyday is a holiday people tend to spend also on those lines.The thinking has to be adapted for structured spending.
3) Medical expenses tend to go up:Our body is like a wonderful ferrari coordinating
all functions.Preventive healthcare is a way to keep medical expenses low.
4) Interest rates are coming down:Interest rates are coming down and will continue to do so in the next 20 yrs.5% rate of interest per annum is likely be a new normal.
We live in India in a high inflationary economy as we are lowly irrigated and also have dependence on oil imports.
A few combination of portfolios which help in the current situation are
1) Debt funds:Debt funds can be used as an cumulative option to earn higher posttax returns.Currently they generate about 8.5-9% post tax.
2) Zero Coupon Bonds:ZCB’s as they are popularly called have a taxation on an indexation basis post 1 yr .
3) Balanced funds:There are funds which generate a monthly dividend.Dividend income is currently tax free in nature.It works as a good tool to save on taxes also.
4) Secured Debentures: Secured debentures tend to offer 9-9.75% depending on rating & credit profile.These are a better way to generate regular income.
5) Rentals:Rentals are better from Commercial properties.Commercial spaces generate
a yield of approx 6-8% per annum depending upon geography and location.
A combination of these helps to build an optimal portfolio generating double digit post tax returns and a fulfilling retirement.