the real value of their savings due to inflation. The average 60-year-old person in India has a life expectancy of about 10 years. Thus, although their overall portfolio may be less risky than in the consolidation phase, they still need some safe investments, such as inflation-indexed instruments for inflation protection.
At this stage, individuals believe they have sufficient income and assets to cover their expenses while maintaining a reserve for uncertainties. Excess assets can be used to provide assistance to relatives or friends, to establish charitable trusts, or to fund trusts as an estate planning tool to minimise the taxes.
To conclude, investor life-cycle investment strategies remain a good automated, risk-controlled asset allocation strategy plan.
The writer is an associate professor in finance and accounting at IIM Shillong