Retirement Planning: How prepared are you?

Take a test.

Answer the following:

1. How old are you?
2. Name important Life Needs that you want to fulfill during your life time.
3. When do you think you will be retiring from active work life?
4. How much is your current savings?
5. How much will you be able to save every month or quarter or year?
6. Allocate savings against your life goals: Never club goals, remember horses for courses
7. what is the level of your total assets and liabilities : figure out Net assets
8. What is your current income?
9. Multiply item 1 and item 8
10. Divide by Number 10

If your answer at step No: 10 is more than your Net assets, be happy and find out how to protect it and enhance it.

If your anwer at step No: 10 is less than your Net Assets, be alert and find ways to accelerate growth.

Those who just started to have their first job, there is a great opportunity in waiting.
Those who have mid career needs to re-work the chemistry of life
Those who are nearing retirement needs to find protective investments that will sustain them through the empty nest stage.
The New Pension Scheme offers a lot of opportunities for the first two. There are start-up issues in the NPS, though.The DTC will come as a surprise on you, if you do not plan your investments through the life stages Balyam, Kaumaram, Yauvanam, Vardhakyam and Vanaprastham, leaving the impact painful in the middle and unmanageable in the last two stages.

The last but not the least class, has several fixed income options available today.

Senior Citizen Savings Scheme (SCSS) is a fixed-income product that offers 9 per cent return per annum compounded quarterly. It matures after five years and can be extended by another three years. It, however, comes with a couple of riders: an individual cannot invest more than Rs 15 lakh in it and the investor needs to be at least 60 years old at the time of investment. POMIS or fixed deposits of Banks are also there in addition to MIPs from Mutual Funds.


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When the Market moves with Cricket.....

India won the series... Once again Sachin Tendulkar did the trick for India..The rest of Team solidly behind, India showed its resilence capacity.

Capital Markets also carried the same sentiments.

The statistics says that domestic funds are net sellers and FIIs are net buyers for quite some time. The huge IPO from Coal India Limited is expected to drain some liquidity from the markets in addition to what the RBI has done recently.

How should one approach the Mutual Funds in this kind of a scenario?

Those in SIP, should continue same. Any time is good for starting investing. Make a small investment and feel for yourself how it grows.. watch its progress related to a life need. That is basic human tendency one should recognize. Human beings require a target to go steadfast with the investments. Those who are in diversified equity funds with small cap portfolio may book some profit.

Another human tendency is to look at losses more seriously than the profits. Loss even if it is minor, it is painful. But a small profit makes him happy. Observe one's own behavior and try to logically look at your investment.

Another human tendency to be careful is to go by herd. Every body got profits,I did not get any.I am in the energy sector. I am left out of the rally. so let me switchover. one should embrace sectoral funds, if only have adequate knowledge about the sector. Otherwise always go with an index fund or diversified equity fund. Those who go for sectoral funds should have sufficient funds deployed in every possible sector not to get left out of a rally. So full diversification is possible for HNIs and not APL or BPL in sectoral investment strategy.


Another human trait is about being happy with a show of money. One gets a erroneous satisfaction when money is seen. But when it is divided among the different life needs, one will find that the available funds are not sufficient.To fight it out, one should follow the old idiom: horses for courses. Have separate investments for each identifiable life need.