Changing rules of retirement
We need to manage our retirement corpus in a manner so that it grows even as we continue using it
UMA SHASHIKANT 28.01.2019 TOI
Travels during the year-end break helps me meet many people. This week’s story is about three seniors I met. The trouble with nudging the age 60 mark is that we end up worrying about retirement without much provocation. Here are some of the observations and lessons swirling in my head.
Patil Mama is 92. He lives in his village and walks in his fields every day. He enjoys his food and keeps his routine. Shakuntala Mami is 76 and lives by herself in a rented house. She is immersed in spiritual and religious pursuits and spends her time teaching shlokas. Bawa is 68 and lives with his doting wife and son. He is unable to walk or hold himself straight and his condition is deteriorating.
First, all three draw pensions from the government. A tidy sum that appreciates every year from dearness allowance, and gets reset when pay commission recommendations are implemented. So many of us now work for the private sector. Those who work for the government now have the NPS. The annuity markets pay too little and the era of guaranteed returns is gone. And when we retire, we will have to use finer techniques to draw upon the corpus, without depleting it. So, how do we make the corpus grow while using it?
Second, they all lead simple and frugal lives. They don’t need expensive gadgets or clothes; they eat simple food; they are happy to travel by public transport. These simple habits make their pensions adequate, leaving behind a small saving at the end of the month. On the other hand, we have converted into a society of consumers. Would those of us on the verge of retirement, be willing to give up the luxuries our corporate lives have afforded us?
Third, the quality of the seniors’ lives is determined primarily by their relationships and their health. Mama is still the patriarch, well respected by the villagers. Mami is loved for being the dynamic and fearless lady who lives by herself. Her neighbours and friends dote on her. Bawa, however, is a lonely man. His wife worries if he is depressed. We are a generation with no roots. We went where the jobs took us, made friends along the way, and hope to make more new friends in the retirement villa we have bought.
Fourth, the qualitative difference in their lives, and the joy in everyday existence is driven by a strong sense of purpose. Mama is keenly following the efforts of his son to create orchards and is learning even at this age. Mami is learning new shlokas and hymns each day to teach more people. Bawa is a sad man who does not practice medicine that he learned, or acupuncture and yoga that he mastered. He has been gripped with fear after an accidental fall a few years ago. Without purpose, so much of life is lost.
Fifth, Mama hardly complains of health issues. He rests when tired, and is otherwise active. Mami keeps good health and has her routines of daily walk and exercise. Bawa sadly, is unwilling to see the doctor to get treated and has all but lost his mobility and independence.
While friends tell me lovely new age stories of how the newly retired travel the world, meet friends, eat out, and have a lot of fun, I remain concerned about the safety nets of pension, family, habits and health. Bawa’s deterioration sets alarms bells ringing in my head. I wonder if we are truly well prepared.
The author is Chairperson of The Centre for Investment Education and Learning
We need to manage our retirement corpus in a manner so that it grows even as we continue using it
UMA SHASHIKANT 28.01.2019 TOI
Travels during the year-end break helps me meet many people. This week’s story is about three seniors I met. The trouble with nudging the age 60 mark is that we end up worrying about retirement without much provocation. Here are some of the observations and lessons swirling in my head.
Patil Mama is 92. He lives in his village and walks in his fields every day. He enjoys his food and keeps his routine. Shakuntala Mami is 76 and lives by herself in a rented house. She is immersed in spiritual and religious pursuits and spends her time teaching shlokas. Bawa is 68 and lives with his doting wife and son. He is unable to walk or hold himself straight and his condition is deteriorating.
First, all three draw pensions from the government. A tidy sum that appreciates every year from dearness allowance, and gets reset when pay commission recommendations are implemented. So many of us now work for the private sector. Those who work for the government now have the NPS. The annuity markets pay too little and the era of guaranteed returns is gone. And when we retire, we will have to use finer techniques to draw upon the corpus, without depleting it. So, how do we make the corpus grow while using it?
Second, they all lead simple and frugal lives. They don’t need expensive gadgets or clothes; they eat simple food; they are happy to travel by public transport. These simple habits make their pensions adequate, leaving behind a small saving at the end of the month. On the other hand, we have converted into a society of consumers. Would those of us on the verge of retirement, be willing to give up the luxuries our corporate lives have afforded us?
Third, the quality of the seniors’ lives is determined primarily by their relationships and their health. Mama is still the patriarch, well respected by the villagers. Mami is loved for being the dynamic and fearless lady who lives by herself. Her neighbours and friends dote on her. Bawa, however, is a lonely man. His wife worries if he is depressed. We are a generation with no roots. We went where the jobs took us, made friends along the way, and hope to make more new friends in the retirement villa we have bought.
Fourth, the qualitative difference in their lives, and the joy in everyday existence is driven by a strong sense of purpose. Mama is keenly following the efforts of his son to create orchards and is learning even at this age. Mami is learning new shlokas and hymns each day to teach more people. Bawa is a sad man who does not practice medicine that he learned, or acupuncture and yoga that he mastered. He has been gripped with fear after an accidental fall a few years ago. Without purpose, so much of life is lost.
Fifth, Mama hardly complains of health issues. He rests when tired, and is otherwise active. Mami keeps good health and has her routines of daily walk and exercise. Bawa sadly, is unwilling to see the doctor to get treated and has all but lost his mobility and independence.
While friends tell me lovely new age stories of how the newly retired travel the world, meet friends, eat out, and have a lot of fun, I remain concerned about the safety nets of pension, family, habits and health. Bawa’s deterioration sets alarms bells ringing in my head. I wonder if we are truly well prepared.
The author is Chairperson of The Centre for Investment Education and Learning
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