Retirement Planning

Posted: Sunday, Apr 08, 2007 at 0114 hrs IST
Updated: Sunday, Apr 08, 2007 at 0114 hrs IST

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: Only thing that comes to you without effort is old age. Old age is not an issue as long as it is healthy and wealthy. However, it becomes a sore thought if you don’t have plenty of both as it reduces the ‘propensity to work’ and ‘active pursuance of income’. This certainly was not an issue a couple of generations ago when Indian culture was revolving around the ‘joint family’ system.

People were taken care of by someone or the other in the family.

But things have changed after the transition from joint families to ‘nuclear families’. The ‘moving out’ of the kids have made people think about the autumn of life when they have to sustain life with their accumulated savings, if any, and all other sources have dried up. The things stand worsened when one looks at rising longevity and lack of social security net supporting an individual when he is not working any more.

This concept of ‘retirement planning’ is fast gaining momentum. One must ponder over the concept before one decides to go for it. Retirement is nothing but withdrawal from service, office, or business where one actively seeks money. It does not mean doing nothing. But it connotes doing things that you like at your pace and at your leisure.

It connotes that retirement does not mean getting rid of life and one cannot escape paying his bills, though the list of bills payable may change. There may be some deletions from the expenses list like kids’ tuition fees but there may be some additions like hospitalisation expenses.

A retirement, however, can be a pleasant experience full of leisure in the company of loved ones.

As Nobel laureate, economist Milton Friedman says, "There are no free lunches in the world", one should note that the things just don’t come free. All earthly pleasures come with a price tag and a pleasant retired life is no exception to this rule.

As economists define demand as willingness and ability to pay for something, demand for a pleasant retirement is not just asking for it. So one who aspires a pleasant retirement should very much be prepared to pay for it.

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