‘Change is the only constant thing in life’ – this adage is very apt for today’s unpredictable future. Life as we know it has changed but has it changed for the better? This is one very pressing question that hovers around every ageing couple. Despite technology running every aspect of our life, seniors today are still looming in the dark when it comes to planning for their future.

Going by several research reports, experts suggest that longevity of life has increased and people are expected to live beyond 85 years. Imagine a situation, wherein you live a long life but are unprepared financially, how would you survive? In today’s unconnected emotional world, life is even more complicated with information overdose, thereby further complicating one’s understanding. With this scenario, seniors today still hold on to more reliable investment options with less risk.

The need of the hour today is a better and clear understanding to seniors about new investment options. This will certainly make them reconsider investing their hard-earned money. This is a very important life decision as investments are as much about emotions and decisions as per our needs, cash flows, and lifestyles. We need to realise that on our retirement journey when it comes to choosing a retirement plan, the options before us are limitless. We need to make the right choice and be prepared at any age. A financial plan is a road map to help people achieve their goals and this of course applies to their retirement years.

The Right Investment Path

Going by previous sentiments, it is believed that we can live for up to 30 years and more post-retirement. Interestingly, women live longer than men. Keeping this scenario in consideration, we should realise that any investment returns should earn above inflation which is above 8 per cent to maintain our future lifestyle. It is also essential that our investments should have a yield to take care of ever-increasing costs as per the inflation rates. Looking at just the medical expenses, the inflation rate in India is around 11 per cent, meaning that a blood test costs Rs 2,500 today will cost Rs 11,961 after 15 years and Rs 20,000 after 20 years. The escalations are unimaginable. It is thus imperative to invest in diversified channels other than the regular Fixed Deposits or Post Office Schemes to beat future inflation.

Recently, I interacted with a bunch of older adults on Evergreen Club, a lifestyle and wellness digital community platform, several pertinent and essential questions were raised on today’s investment planning. We need to understand that inflation is not about the pricing going up, it is the value of money that comes down. Seniors today must invest with a budget in mind. This budget can be gauged keeping in mind your needs and requirements. One also needs to factor in the risk analysis of today’s investment which can only be explained with the help of a qualified professional.

Every senior individual needs to keep these basic facts in mind - having a million rupees is not a retirement plan. It is important to understand how do you invest and grow that million rupees for your future. A simple categorisation of your expenditures is the following:

The Essential Bucket fulfils your daily routine needs, the Lifestyle Bucket catering to the fun aspects of life, and the Nest Egg Bucket catering to emergencies

Prepare for the Future

It is essential for every senior citizen to make a will in their lifetime, irrespective of age, and have the right nomination, as times are changing and someone can contest a nomination. We need to understand that today banks will give deposits to the nominee unless it is not challenged. Making a will safeguards all your hard-earned assets. Get a CA or Lawyer to draft your will in the right language. Husband and wife should have separate identities and both can individually decide what to do with their money. For women, it is imperative that they take pictures of their jewellery and mention behind the photos – the weight of gold, the number of diamonds, how many rubies, etc.

If one does not need an income, invest in a growth option to receive cash flow. We need to understand that while investing in any equity, will give you long-term growth, but in between, there will be volatility. Don't expect immediate returns wherein you make your investments today and expect quick returns - that will not happen. In equities, the returns are either front-ended, back-ended, or in the middle during 7-8 years. Clearly understand how a particular asset class works to set expectations on yielding returns.

Finally, it is very important to understand the difference between creating money versus creating wealth. For a simple understanding, if you invest Rs 100 in a regular saving scheme, with interest it becomes Rs 110 in a fixed tenure period - this is the classic way of increasing your money. However, taking today’s equity investment scenario – If you invest Rs 100, this can grow and compound to either Rs 8000 or Rs 10,000 in 20-25 years – the risks are higher in a short period but in long term the dividends are exponential. Thus, it is essential to take on the services of a financial advisor / Mutual Fund Distributor who will guide you in your investments’ thus handholding you, ensuring a smooth and substantial journey of wealth creation.