Page 29 - Seniors Today -Volume no1

the form of provident fund, gratuity etc, an
illusion gets created that there is lot of money.
The same is then spent on a lot of unnecessary
expenses, without considering the long period
ahead without the regular monthly income.
While it is absolutely essential to spend on
oneself, the idea is to strike a right balance
between excessive indulgence and frugality.
3.No / Inadequate Medical Insurance
One of the biggest mistakes is to underesti-
mate the potential medical expenses and not
plan for any medical contingencies. The single
most important element of financial planning
for senior citizens is to have a sufficiently
large medical insurance cover. A shortfall in
medical insurance can put a severe dent in the
overall retirement corpus. While the appro-
priate amount will depend on case to case very nascent stage in India and mostly limited to
basis, but as a thumb rule a retired couple a very limited set of families in the society. As an
should have at least a medical cover in excess important part of financial planning, it is abso-
of INR 10 lakhs. lutely imperative for an individual to ensure that
there is a very clear set out succession plan and all
the impacted parties should be appropriately kept
Expensive, illiquid products sold as invest-
ments informed about the same. This ensures a seamless
A very common mistake that retired investors transition of one’s financial legacy.
are susceptible is to be mis-sold annuity/pen-
sion schemes packaged together with insur- Reliance on Family & Friends for Investments
ance. Such products are not only expensive, A very common mistake which investors are
but also very illiquid. Technically, there is no prone to commit is to rely on family and friends
need of any sort of life insurance during this for investments or simply replicate their invest-
stage of life and hence any product (invest- ments. One has to understand that every retire-
ment) being sold under the premise of insur- ment journey is different and hence cannot follow
ance should be completely avoided. the same path. It is therefore important that one
seeks qualified professional help with respect to a
holistic financial planning. While this is relevant
Rich, but Cash Poor
As the heading says, a lot of senior citizens ex- for an investor at any stage of life, this assumes
perience this problem of being quite wealthy more importance in the retirement phase as the
but constrained by low cash levels. This is a potential to reverse a mistake is quite low during
result of appropriating a high percentage of this stage of life.
the wealth towards illiquid assets. This could When you know what not to do, the path to suc-
lead to dependence on children or need to cess is clear. In the journey of retirement, one has
dispose of such illiquid assets in distress, both to ensure that they avoid these mistakes to ensure
situations which are not desirable. Hence it is a less bumpy road ahead. In the next edition, we
absolutely critical to ensure sufficient liquidi- examine the various investment options suitable
ty as all times. for retired citizens that help them achieve their
desired goals.

Inadequate Succession Planning
Succession planning, as a concept, is still in a Happy Investing!!!

SENIORS TODAY | Volume 1 | Issue 1