4 smart ways to contribute to your father’s retirement this Father’s Day

By: |
June 21, 2020 10:56 AM

Even if you cannot help your father financially, you can give him that valuable support or suggestions that will ensure a dignified retirement for him.

retirement planning, Father's Day 2020, saving, investment for father's retirement, Senior Citizens Savings Scheme, Pradhan Mantri Vaya Vandana Yojana, fixed deposits, health insurance, Covid-19 It is important that your father enters his golden years with a clean debt slate.

Father’s Day 2020: Our fathers play an important role in shaping not just our personalities but also our financial habits. They make numerous compromises and strive unceasingly to ensure the best for us. So often, focussing on our requirements comes in the way of their own financial goals – especially retirement planning.

As a child, you may have paid little attention to your father’s financial hardships. You may also be unaware about how your father intends to sustain himself through his non-working years. Does he have a pension plan? Has he invested adequately? Does he have health coverage? These are some of the conversations you need to have with your father to ascertain his financial security needed to lead his golden years with dignity. If you haven’t had these talks with your father yet, what better an occasion than Father’s Day to get started?

Let’s look at some topics you could discuss with your dad.

Understanding His Financial Situation

Let’s get an overview of your father’s retirement planning to understand what he’s achieved with regard to this goal, and what more needs to be done. Your father would have made investments that could provide him an income in retirement. Ascertain if this is enough for his daily expenses. If it’s not, determine what can be done to help him get more.

Getting The Most Out Of Investments

Investing as a senior citizen, your options get narrower. There’s a greater need for assured returns, safety of capital, and liquidity. Therefore, check if your father’s investments meet these requirements. Firstly, help him max out on some of the best options available to him. Government schemes such as the Senior Citizens Savings Scheme and the Pradhan Mantri Vaya Vandana Yojana are some of the best ways he can earn assured returns with full capital safety. With falling interest rates and economic uncertainty all around, you must also let him know about potentially risky investments like volatile mutual funds or low-rated corporate FDs. The money he needs for immediate requirements should be held in deposits with reputed banks. The rest can be invested in instruments such as SCSS that can gradually pay out over the next 5-10 years. Find him a certified investment advisor who can plot a financial path for his golden years and help him find the right mix of investments.

Talk To Him About His Insurance Coverage

The world has a health crisis at hand with the Covid-19 epidemic. Having health insurance has never been more important. Talk to your father about his coverage. Does he have a health plan? If he does, how much is the sum assured? Can it be increased? A super top-up will be most useful to him. If he doesn’t have coverage, in what ways can your family’s finances be protected against a costly hospitalisation? He must buy coverage on priority, even if it’s at a high cost. If he’s ineligible for one due to his age or pre-existing health conditions, it may fall upon you to ensure he’s covered through your employer-provided group health cover. Additionally, it would be wise to set aside a fund that will carry him through a costly hospitalisation in the absence of health insurance. You can help your father create this fund.

Check About His Debt Status

It is important that your father enters his golden years with a clean debt slate. This would ensure peace of mind and leave his disposable income for him to spend as he pleases. If he’s still in debt, understand how and why this is. Extend a helping hand if you can. If it’s a petty debt that can be settled with a bullet payment, help him out.

Finally

Your father will cherish the time you will spend with him. Even if you cannot help him financially, you can give him that valuable support or suggestions that will ensure a dignified retirement for him. Lastly, help him you must, but in a manner that allows you to remain financially stable yourself.

Here’s wishing all the wonderful dads out there, a very happy Father’s Day!

(The author is CEO, BankBazaar.com)

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