Discover Effective Retirement Planning: Ensuring a Confident and Peaceful Retirement with K.S. Rao, Amit Trivedi, Harsh Roongta, and P.V. Subramanyam.
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00:00 Welcome to this webinar series, which is a part of the Investor Education and Awareness
00:13 Initiative of Aditya Birla Sun Life Mutual Fund in association with Outlook Money, India's
00:19 number one personal finance magazine. Today, we are discussing about a financial goal that
00:24 is often ignored but is among the most important. We have a panel of four experts to discuss
00:30 the topic retirement planning, how to secure your golden years. It is estimated that the
00:36 number of retired people is only going to steadily increase over the years. And therefore,
00:41 it becomes very, very important for people to start thinking about retirement early on,
00:46 which a lot of segments do not do, especially the younger segments. So today, we are going
00:52 to discuss this topic. I am Nidhi Sinha, moderator of this discussion and editor Outlook Money.
00:59 And I'll start with introducing the panelists today. First of all, I would like to welcome
01:03 Mr. K S Rao, who's the head of investor education and distribution development at Aditya Birla
01:08 Sun Life AMC. Mr. Rao has been striving to take financial literacy and investor education
01:15 across the country. We also have with us Mr. Amit Trivedi, who is an author, speaker, blogger
01:21 and trainer. And he has written many books on financial planning and markets, including
01:28 writing the roller coaster. Our third panelist today is Mr. P V Subramaniam. He's a chartered
01:35 accountant, a trainer, educated and author on a very interesting book on retirement.
01:42 And I'm sure he'll be sharing details from that today. The fourth expert on this panel
01:48 is Mr. Harsh Roonta, a personal finance and tax expert, SEBI RIA and author. And he's
01:54 been part of the retail lending industry for a really long time. So let us start the discussion
02:00 on retirement, Mr. Rao. One of the things that one looks forward to during retirement
02:06 is peace of mind, you know, because you think that, you know, your working life is over,
02:11 your responsibilities are over. Now we can relax. And one of the factors that can play
02:17 a role in that is having your financial planning sound and having enough to take care of your
02:24 proposed retirement needs. So could you explain the basic things that one should keep in mind
02:30 when retirement planning and how that can provide confidence and peace of mind to an
02:35 individual?
02:36 Thanks Nidhi. Thanks for having me. And indeed, again, it's an honor. I look at, when I look
02:42 at this book of retiring rich, I don't think I need to tell anything. Everyone need to
02:47 aspire for that, you know, retiring rich. But if I look at retirement planning before
02:54 we do, probably fundamentally, every one of us need to look, maybe I look at these five
02:59 questions one need to ask. I mean, you know, pre-retirement or when you are planning, it
03:04 is like all that, you know, how much I'm starting with on retirement, what is the amount of
03:08 money I need, the first question I need to look at. And second is how long this money
03:13 should last, like, you know, means how long I'm going to live my life, I mean, expected
03:17 to live my life, whether, you know, my life lasts money or my money lasts beyond my life.
03:22 And the third one is like, you know, how do you want to end up with it? You know, it's
03:26 like, I mean, most of the occasions where me and Amit, we discuss about the legacy which
03:31 you plan, you know, the one you want to give it, you know, whether you are giving to your
03:34 family or to the church or to the charity, you know, what is that you need to look at.
03:38 And the question comes here is how much return you are looking at it on the corpus, what
03:43 you are looking at, when you are looking at it. Predominantly, I'm talking about somebody
03:46 who is retiring at 55 or 60 and they're planning for it. And the last question you need to
03:52 ask is what kind of risk we need to take. And we always presume that the moment we retire,
03:57 our ability to take risk will become, riskometer comes back to zero, which may not be right.
04:03 And that's where we need to look at, we need to reassess what is that I need to look at.
04:07 And then here comes the ROI, which we normally talk about. But in the retirement, I look
04:14 at ROI can be redefined in various ways. The first ROI is regularity of my income. That
04:21 is the most important part. And second ROI I look at is the reliability of income. You
04:26 know, I mean, how far you are getting, how guaranteedly you are getting it. I mean, you
04:30 know, whether that is a flexibility, there is a volatility on getting that. And the third
04:34 ROI I look at is the rate of interest you are earning. And this depends on the fourth
04:40 ROI is the rate of inflation with the country is running and which country you are living
04:45 in, you know, how that inflation can be fine. And the last one ROI is when I put my money,
04:50 it is return of investment or return on investment. If I can put these questions right and rest
04:57 of the things can always be planned.
04:59 Great. So that was, you know, five ROIs that our viewers should keep in mind. We'll kind
05:06 of take them on the path, we'll guide them on the path to sound retirement planning and
05:12 a post-retired life with the peace of mind they may be looking forward to. So but coming
05:18 to you, Mr. Roonta, during the process of retirement planning, what are the what are
05:21 the key factors that one should look at, keep in mind, and what are the factors that one
05:27 should avoid if we have to list it like that for people?
05:31 So if you define retirement as a period during which you have no earnings, no earned earnings,
05:38 right? Let's define it that way rather than through an age or a number, etc. Then the
05:44 starting point could be that you need a replacement for that income to the extent of expenses,
05:52 right? So you would need to estimate what those expenses could be. And you know, that's
06:00 not an easy exercise for a lot of people. And there can be and and in fact, you know,
06:07 the more the higher the lifestyle you lead, more difficult it is for you to sort of imagine
06:17 the kind of lifestyle you will lead when the income is no longer coming in, right? Some
06:26 of the things so I mean, you can write a I mean, Subra has written a book on this, right?
06:31 So we are going to just do this in five minutes. So what I would like to highlight are two
06:37 things that people miss most when they are estimating these expenses. Okay? One is unlike
06:46 today, see, some when somebody is in his 30s or 40s, their family, their social circles,
06:54 their folks back at home, back in the village, wherever they come from, in the community
07:00 that they are part of, they look at them very differently. But when that same person retires,
07:05 let's say now from a senior position, the expectation of the family of the community
07:12 of every social folks that they interact with is very different, right? And that sort of
07:20 imposes a certain cost on you, which is not, which is not inconsequential. Okay? And I
07:27 think people also would like to do that. I think Mr. Rao mentioned about, you know, the
07:37 imperative, the felt need to give back, right? So all these things, I don't think people
07:44 really look at seriously and that is as much a part of your retirement planning. It's not
07:51 a top up over your expenses. I think at that stage of your life, okay, because if you're
07:57 not going to give back at that time to your family, to your social circles, to your community,
08:03 when are you going to do it? Okay? So I think that is one part. The second part, I think
08:11 that again is frequently missed out is this, that we are living for so long now, right?
08:20 And what we call the last decade of our lives typically, okay, is spent disabled effectively.
08:30 How you end up spending the last decade of your life, okay? Health wise, social wise,
08:38 everything wise, but a lot of people have a very difficult last decade of their lives,
08:45 right? And that has some, lots of financial implications. One among them is long term
08:51 care. Okay? Now, long term care typically worldwide is taken care of through insurance,
08:59 maybe through reverse mortgages. Now reverse mortgage as a product exists in India, but
09:04 again, it's not being used for this purpose. The point is people don't think about long
09:10 term care. And you know, that long term care may or may not be needed, but more and more
09:15 people are increasingly needing it. And that's very easily, you can, you know, you can dovetail
09:23 your long term care requirements with your legacy requirements. If the long term care
09:29 require, because most people don't have all the money in the world that they will separate
09:33 out for long term care and separate out for legacy. So one of the ways that we have found
09:39 for clients is that it's allocated to long term care. But if it is not used, it can go
09:47 to legacy. So long term care for yourself, long term care for your spouse, if both of
09:53 you don't need to use it, then it goes to the children or any other place where you
09:59 want your legacy to go to.
10:02 Right. So, Mr. Rumtey is talking about this, you know, putting these separate, creating
10:09 these separate buckets on say long term care and legacy. So, Mr. Subramanian, I want you
10:15 to come in here and also tell our viewers about even during the phase of saving for
10:22 retirement, how does one balance between different goals, because they are also different buckets
10:27 of life, which you need to cater to. And if you could also give us some insights from
10:33 your much discussed book today.
10:34 My book is not meant for the older people, it's meant for the 22 year olds starting in
10:40 how to invest and how to ensure and things like that.
10:45 Today, we are also trying to address retirement planning. So maybe a younger person who needs
10:51 to, you know, wake up to this need to do it early as soon as possible. Yeah, please go
10:56 ahead.
10:57 So, one thing is prioritizing goals. You have to understand one thing, you will never be
11:03 able to borrow for your retirement, because you're borrowing basically because people
11:08 think you will be able to repay. You don't have a home loan, you don't have a car loan,
11:13 you don't have a vacation loan, you have a form 16 loan. When they see you have a good
11:18 qualification and a good job, they can afford to give you a loan because they know from
11:22 the salary you're going to repay. So you cannot borrow for your retirement. So your topmost
11:27 priority has to be your retirement. Anything else you can borrow or your children can borrow.
11:32 So you can always tell your child who is going to cost you 70 lakhs to study, fantastic,
11:36 I'll give you 20, go and borrow the other 30, 40, 50, whatever you need. So priority
11:41 has to be your retirement and not children's education, children's marriage or anything
11:47 else. And those who don't believe this should watch any channel, they've shown Bhagwan 25
11:52 times. If you missed it, go and watch, they'll show it to you. So you have to understand
11:57 that when you prioritize, children think it is their right to get the money from you.
12:02 But that also happens because we don't communicate enough with our children. What is reasonable
12:07 and what is unreasonable, children don't know. Children don't know whether it is their right
12:11 to ask you for a 35 lakh education or for a two and a half crore education. Your job
12:18 is to communicate and say, look, my priority is retirement. I'm going to live till this
12:22 age perhaps and I need to provide for. Also understand that you don't know how long you
12:28 will live. You do not know how much corpus you will start with. You do not know what
12:33 will be the rate of return you get. You don't know how much you will spend. And the most
12:37 important thing you could be one of these things going wrong and you'll be completely
12:41 out of money for your retirement. I was doing a lecture in Lucknow and it's normal for me
12:46 to ask how long do you think you will live? So one of the guys got up and said, I don't
12:50 know, but my neighbor is 114. None of us prepare for that kind of a life. We may prepare for
12:58 80 or 90, but 114 we are not prepared for. So anything going wrong, rate of interest
13:05 falling, your investment in equity is being wiped out. Anything going wrong can completely
13:10 change. And I wouldn't have said it so much of ferocity if I had not seen people going
13:16 wrong during COVID because if a person retired with say 90 lakhs for retirement saying, oh,
13:22 my consultant has told me I spend 3 lakhs a year. So 30 years income is 90 lakhs. I
13:29 have that much as a corpus. Completely wiped out 40 lakhs or 30 lakhs due to COVID. I mean,
13:35 maybe his mother, maybe his wife or father, somebody wiped out 30-40 lakhs, you have to
13:41 go back to your job. So how much money you have, what is the comfortable level? Like
13:45 you know, there's a 7 o'clock train. Some people are happy teaching at 6.55 and there
13:50 are some people who are happy teaching at 6. Saying I'll go, I'll find my place, I'll
13:54 fill up water, I'll sit down. So there are, it's your attitude. I can only say, okay,
13:59 you need 2 crores for retirement. Somebody is happy at 199. Somebody needs 5 crores to
14:04 be happy saying, you know, what if something goes wrong or things like that. So each person
14:08 has to be there. So you have to decide what is your priority and your topmost priority
14:13 has to be retirement. Like I said, you can't borrow for your retirement. You don't know
14:17 how long you will live. So if you die early, that's good. But if you don't die early, you
14:22 need money to last. You have to remember one thing, your money has to last longer than
14:26 you last. So children's education, yes, it's important, but children should be able to
14:31 borrow for their education, not totally depend on it. If you have 20 crores and your child
14:37 needs 2 crores, but if you have 3 crores and your child needs 2 crores, just don't do it.
14:42 So your priority has to be retirement, not children's education, not children's marriage,
14:47 nothing else because your retirement, you don't have, old age is bad and old age without
14:52 money is terrible. So please remember that. So preparing for your old age financially
14:57 is very important.
14:58 Definitely. That is quite a scary picture that Mr. Subramaniam has presented, but it
15:03 is largely true. And that is why this discussion is so important and people really need to
15:08 wake up to this need and start preparing, investing and planning accordingly. So, but
15:15 when it comes to, we have established that retirement planning is really, really important
15:20 and above a lot of other goals. But one of the questions that you often hear is that,
15:27 okay, I have started saving, but how do I decide that I'm saving enough? Like Mr. Subramaniam
15:32 was also highlighting, you might not know what goes wrong in the future. So Mr. Trivedi,
15:38 if you would like to take that question, what are the factors that one should consider when
15:43 saying that I will save XX% every month from my salary or something like that?
15:49 Subra actually had answered this question when he wrote his book for the first time,
15:54 invest rupees 40 a day. Now, look at the date of publication and adjust the amount for inflation
16:00 and most people should be fine. Right Subra?
16:04 Yeah, today it will have to be an increasing S&P, 40 in the first year, 44 in the second
16:11 year, 48 in the third year.
16:13 But you know, Nidhi you are right, Subra, the reality check he presented is really scary
16:22 for a lot of people and that's why Subra finds it comforting to go to Kandahar and visit
16:27 tigers and that's less scarier for him than facing retirement question.
16:34 So now let's come to some of the pointers that we need to look at and there are some
16:39 of the factors that one needs to look at to arrive at some number to begin with. Now,
16:45 whether you start with rupees 40 a day with an increasing SIP or how much you should be
16:50 comfortable with, let's look at some of the factors. So the factor number one, and this
16:54 is the known thing for any individual, is the current age. The second, a little knowable
17:01 thing but little uncertain is the age at retirement. But third is the unknown, the age at the time
17:07 of death or the longevity. Now that's unknown and that longevity is increasing by the day.
17:16 Actually, statistically it is true that my longevity at 50 could be, let's say, I am
17:25 just taking an example, if my longevity is 75 when I am 50 years, at 60 it is likely
17:31 to be 78. So as I age, my longevity is likely to inch up a bit and this is statistics because
17:41 people who are at my age, if all of them are likely to live till 75 on an average, because
17:47 we look at that average number, between 50 and 60 some might have passed away. So those
17:52 who survived at 60, they have to live slightly longer. And that's how the insurance companies
17:58 also build their actual tables. So the longer you live, the longer you are likely to live.
18:05 And it's counterintuitive but that's how it works in real life. So this is number one.
18:09 So your longevity and that's why the example of that 114 year old person is a real eye
18:17 opener. So that's the age related factors, three factors. Then the current corpus that
18:24 you have, how much income you will need in the first year of retirement and if there
18:31 are any other financial goals that you might have to fund in the retirement age. I mean
18:38 that's another factor that a lot of people don't count but there are families you've
18:44 seen where a grandfather is funding a grandchild's education because the parent of the child
18:53 is not in a financially good condition. And I am not talking about somebody doing out
18:58 of will. I am talking about somebody doing out of compulsion because the next generation
19:02 is not capable. So if there is any such thing, account for it. If you have any other goals
19:08 like you love to travel, you love to do charity, put down those goals on paper and assign an
19:17 amount towards that. So that's the three other factors. Then again the tough question which
19:23 is the inflation for a youngster. How much is the expected inflation in the earning years
19:30 when you are accumulating and how much is the inflation going to be in the retirement
19:35 years? I am sure even the Reserve Bank Governor or the Chairman Planning Commission doesn't
19:41 have an answer to this question but we still have to start with an assumption. Then comes
19:48 a related point which is return on investment in the pre-retirement age and the post-retirement
19:54 age. If your portfolio composition changes, the difference between the two phases is in
19:59 the pre-retirement age you are putting more money into the corpus, in the post-retirement
20:04 phase you are withdrawing money from the corpus and that's how the composition of the portfolio
20:07 must be, it can't be the same. And of course finally, do you really want to leave something
20:14 for the next generation? Do you want to leave something for some charity of your choice
20:20 etc. etc. But as Herschel was mentioning, the charity must begin at home. So first you
20:28 take care of your requirements which includes long-term care and long-term care I think
20:35 it needs to be simply repeated what Herschel was mentioning. We do not have solutions at
20:42 this stage in India. Reverse mortgage has not taken off properly and there are some
20:48 scary stories in even getting the loan sanctioned, reverse mortgage loan sanctioned and people
20:54 are finding it difficult and long-term care insurance just does not exist. And in such
20:59 a case, if we don't count that much, you know the worst part is and that's what when a lot
21:07 of people talk about retiring early, I really find it funny. You can actually extend your
21:12 retirement, work till 70 but if you need money at 90, nobody will give you a job. You are
21:18 unemployable at that age. So need to put these numbers and then arrive at something which
21:26 tells you how much you should save on a regular basis. There are a few calculators available
21:33 in the Outlook Money site also. There are calculators which can help you calculate this
21:38 kind of sums. Look at that but be very conservative in your assumptions. It is better to err on
21:45 the wrong side rather than being over ambitious and then getting a negative surprise when
21:54 it is already too late.
21:55 Right. So those are very important points but one of the things that comes to mind is
22:00 that for most people handling all these factors themselves may be a big challenge. So Mr.
22:06 Rungta, I would like to ask you what is the role of financial advisory in retirement planning
22:14 because there will be a lot of things. There will be hiccups in general people's lives
22:19 and they may be too busy to be fair where they do not have the bandwidth. So if you
22:27 could highlight that.
22:29 So I think we can mistake this webinar for a marketing webinar for all financial advisors.
22:36 Not at all. My financial freedom cover is on advisory because we at Outlook Money see
22:43 that advisory is so important for financial freedom.
22:47 This was just on the lighter vein. So the point is if you look at how most people, most
22:58 people think that what advisors will tell them is invest here, this will give you the
23:03 highest return, invest there that is less risky. I think that comes later, much, much,
23:11 much later. I think Subra also mentioned and Amit also mentioned about prioritizing
23:20 retirement. Whenever you travel by air, you hear that announcement that if you have a
23:28 child traveling with you and if oxygen masks drop overhead, you should first put on your
23:34 own mask and then help the child, your own child maybe. Because you will be able to help
23:41 the child if you yourself are secure.
23:45 And I think that retirement is that oxygen mask that you have to put on yourself rather
23:56 than first looking at your child or any other obligations that you have. It does not mean
24:06 that those obligations are not important. What it means is that you will be able to
24:12 look at those obligations once you have taken care of your own obligation to yourself. I
24:20 think and that is very important because unfortunately, most people do two things. One, they never
24:28 prioritize and when you never prioritize typically chronologically, if you again define retirement
24:37 as the time when you stop earning, chronologically retirement happens the last. And therefore,
24:45 it automatically gets the last priority because people just look at things that are in front
24:51 of them. They don't really do planning to do retirement is more important, child's education,
25:00 maybe marriage. So, if the child's marriage happens first, then if the money is spent
25:06 there, if you force your client to do that trade-off, this is the trade-off you are doing.
25:15 I think the client takes a much more informed and a much more rational decision and really
25:23 the advisor's value in gold that is there. The second thing is people looking at absolute
25:31 amounts. So, if you are looking at a 25-year-old and he says, I am on target to get one crore
25:39 at the end of 60 years. Now, one crore to him at that stage of his life or her life
25:47 may appear to be a huge sum of money. The moment you apply expected inflation, etc.
25:54 and the fact that you will live maybe 30 years after that 60 years, that amount will appear
26:02 to be a huge sum of money. So, I think these are some of the things that you really need
26:09 to plan and when you plan it gives you freedom because even the sense when you are undertaking
26:17 a long journey and life is a long journey, when you are undertaking a journey, as long
26:24 as you feel that you are moving in the right direction, maybe there will be setbacks during
26:29 certain points of time. But as long as you feel that you are moving in the right direction,
26:35 that itself gives you so much confidence that it allows you to overcome setbacks which might
26:44 otherwise pull down other people. Therefore, doing a mapping exercise, doing a planning
26:52 exercise before you start on this journey called life can really pay huge, huge dividends.
27:03 So, coming to you, Mr. Rao, of course, Mr. Rungta highlighted why it's very, very important
27:09 to plan well and think about it from an early stage. So, we all know that if you think about
27:15 it and start investing early, it might give you the kind of dividends that starting late
27:21 might not. But what if someone has missed that bus and what if someone is starting to
27:27 invest late? Are there any strategies or are there any specific things that they can do
27:31 to kind of cover the distance?
27:34 Thanks, Nidhi for it. Indeed, most of us will fall in that bucket where we all intend to
27:40 plan but we'll never and as Harshji was rightly said, this is one goal we always think it
27:46 can be postponed but it happens suddenly. And this is one goal where you won't get any
27:50 loans but you need to plan for it. Unfortunately, we missed the bus. And however, what we can
27:55 do is, I mean, sometimes you plan late but what you need to do is you need to compensate
28:01 with it. It's like, you know, it's like match up your contributions. For example, if I have
28:06 to create some corpus, if I started 30, start early, then I would have saved less but now
28:11 I'm starting at 40, then I need to enhance my savings. Then how I do, I need to enhance
28:16 my savings to reach. Second, earlier when Amit was talking about, I can extend my retirement
28:22 age, the second part is my destination, I can postpone for a while. Then since I start
28:27 late, I need to work a little more longer. Third could be like, you know, there is a
28:32 fantastic instrument which we all, the Provident Fund contributions which happens to us, you
28:37 know, can I catch up my contributions? Can I expand? And the third is like in mutual
28:43 fund parlance, we always call is a step up SIPs, you know, I can increase my SIPs. And
28:49 this is on the enhancing your supply side. But on the demand side, what you need to look
28:53 at is how I can minimize my expenses, how I can redefine myself, how I can confine to
28:59 I can do it. And you know, for me, the golden age can become a golden age when that you
29:04 are living that word of GOLD, GOLD. And you know, that G stands for me is you are gainfully
29:10 engaged. Probably you don't retire, you can get gainfully engaged, you can put something
29:16 and then that O stands for me is optimally invested. The optimally invested if I start
29:21 early, then fine, you know, I can take little risk. And if I have started late, probably
29:26 I can need to take more risk. And I need to put that investment, my investment should
29:30 earn little more optimal. Then third was that L stands for me, G in the GOLD is your lifestyle.
29:36 If I start early, I have a little lifestyle of my choice. Now, if I start late, I need
29:41 to live a lifestyle of the carcass choice. And the last one is that D, I mean, that D
29:47 part is I have a discrimination to live, reach wherever I want that D I can replace with
29:53 a discipline and where that discipline is I can live within the means. And it is not
29:58 the like, you know, what I call it as I need to live out of distractions. Probably if I
30:04 have started early, I would have lived out of a divinity, I would have spent something
30:07 more. Probably either way you can redefine your GOLD that can work for you. And these
30:12 are the few strategies one can adapt.
30:14 Right. So, redefine your strategies as per the GOLD definition that Mr. Rao has put out.
30:22 But I want to take this discussion a step ahead, Mr. Subramanian, what if, you know,
30:27 we are of course, talking about these assumed circumstances, but there are people who suddenly
30:33 realize at the time of retirement that, oh, I didn't really wake up and didn't really
30:38 say what spent all my money on my children. So, what can be some of the strategies that
30:44 they can look at? Like reverse mortgage is one option that was being discussed, but it's
30:50 not very well developed in India. So, what are the other things that one can look at?
30:56 Actually, when people ask me what is the risk of investing poorly or not investing well,
31:01 it's very simple. So, from the age of 60 to the age of 75 or 76, you have lived independently.
31:08 At 76, you may have to go and live with your children. There is no choice other than that.
31:12 You can't suddenly hope for something better. Hope is not strategy. You also asked how much
31:18 money should one have for retirement? I think youngsters, you should give a clear goal that
31:23 you should have 1 million US dollars, which means about 8 crores. Will that be sufficient?
31:27 No, but only when you're 60 will you be able to say exactly how much you need. At 30, you
31:32 cannot estimate how much you need. So, 1 million US dollars is a good way to target. So, right
31:38 now it means about 8 crores, 8 and a half crores, whatever. So, what can you do? Really
31:43 not much. It's easy to say, oh, do this, do that, but really can't do anything. You have
31:48 to hope that your children are doing well and they have enough money to look after you.
31:53 Reverse mortgage may not be available because your house may be old. If my house is 20 years
31:58 old, it's not eligible for reverse mortgage. At the time of reverse mortgage, my house
32:02 has to be less than 17 years old. So, it's very difficult to get a reverse mortgage done.
32:06 But yes, you can ship from a more expensive locality. Like if you're in Bombay, if you're
32:11 in Santa Cruz, you can always sell in Santa Cruz and go to Mira Road or something like
32:16 that. So, you sell your house for 4, 4 and a half crores, shift to a house for a crore
32:20 and you'll have 3 and a half crores left, something like that. Reduce the size of your
32:24 house, shift to a cheaper location or maybe shift back to your village where you may be
32:29 able to live more frugally or you have to hope that your children look after you. There
32:33 is no, I mean, you can't suddenly wake up and say, oh, I turned 60. The day you're born,
32:37 you know when you're going to turn 60. So, it's foolish to say, I didn't know I'm going
32:41 to retire. All of us know we're going to retire. The question is how soon you wake up and there's
32:46 no excuse for not waking up because people are retiring around you. So, at least at 40
32:51 or 45, you have to wake up and whatever you can, you should start investing. And like
32:56 what Mr. Rao said, you can always be gainfully doing something, right? There are three stages.
33:01 One is retirement, then there is a vanaprastha ashram and then there is sanyasa ashram. In
33:04 the vanaprastha ashram, you're still giving back to society. So, maybe you're doing training,
33:09 maybe you're doing counselling, maybe doing coaching, maybe you could have done it free
33:13 if you had enough money. But since you don't have money, you have to charge for that. And
33:16 you really retire when you're 75 or something. Most important thing is take care of your
33:21 health because one medical bill can set you back dramatically. So, you have to hope that
33:26 your children are there to look after you. For people who don't have enough money and
33:30 don't have children, then it's a bigger challenge, but then they don't have to leave anything
33:35 back so they can just sell off their house, live in a smaller town or something like that
33:40 and have some surplus. But really, there is no excuse for sleeping till the age of 60
33:44 like Rip and Winkle and suddenly waking up and saying, "Aaj main retire hogaya. Boss
33:48 kuch mat karo, jao aish karo. You've behaved badly so far, you'll pay the price."
33:53 Absolutely. It's inexcusable and ultimately you are responsible for your future. So, that
34:00 responsibility has to be taken head on and as early as possible. But talking about post-retirement
34:06 years and we'll come to the end of this discussion because we've spoken about how to invest,
34:11 where to invest and how to be conscious about all this. Mr. Trivedi, what other factors
34:17 you were hinting at that also, what other expenses that should one look at post-retirement?
34:23 Because some of the expenses will also go down like your children's fees, for example,
34:28 but there are others that may crop up unexpectedly. So, what should be one prepared for?
34:35 I think what Subra was just highlighting medical expenses. That's a big and it can just come
34:43 out of nowhere and hit you where it hurts the most.
34:47 The biggest chunk.
34:49 Yeah. So, it can simply take away a large part of your lifelong savings. So, that's
34:55 one thing that you need to factor. Fortunately, there are insurance policies available, health
35:02 insurance policies available these days, which can cover health issues for a longer period
35:08 and even available for people up to an extended age. Earlier, beyond 60, the policies were
35:16 also not getting issued. So, now some relaxations have happened, which is a very welcome move
35:21 by the regulators and one should explore those. So, that's number one. Number two is, again,
35:27 I will go back to what Harsha mentioned, the long-term care. Now, long-term care need not
35:35 only be related to medical condition, but something or medical treatment. It could be
35:44 some condition arising out of medical issues. For example, because of the old age, my muscles
35:51 have become weak and I can't hold my utensils. Now, I can't cook in the house. I need somebody
35:57 to do that. I think no health insurance would cover the salary of a cook simply because
36:03 my muscles are weak. Some such stuff, so long-term care and the affiliated expenses and healthcare
36:12 are two major issues that we need to really think hard about. The other thing, because
36:22 we are talking about extended life, there's this movie called 102 Not Out featuring Amitabh
36:29 Bachchan and Rishi Kapoor. Rishi Kapoor, the son, was 80 years old in that movie. So, if
36:38 I'm going to live till 102, I am no longer dependent on my children. I'll have to be
36:42 dependent on my grandchildren and probably they are approaching the retirement age. And
36:48 that's really something that needs to be kept in mind. I don't really see a solution right
36:56 away for such a situation. But at least if we are able to visualize a possibility, a
37:02 faint possibility of that, I think that's the first step that we would have taken. But
37:07 the two major expenses, again, repeating health-related expenses and long-term care-related expenses,
37:14 these are two that we need to keep in mind. So, definitely, I mean, a lot of scenarios
37:19 that our experts have highlighted that should really scare you up and should be a wake-up
37:23 call if you haven't already started planning for your retirement. And thank you so much,
37:28 gentlemen, for this engaging conversation today on retirement, which is an ignored subject,
37:34 but very, very important for investors to wake up to. Thanks a lot.
37:37 [MUSIC PLAYING]
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