(H S Sreenath)
As we age, we are expected to look on life,
………… not as in the hour
Of thoughtless youth; but hearing oftentimes
The still, sad music of humanity,
Nor harsh, nor grating, though of ample power
To chastise and subdue.
When one is young, one is full of ambition. This is only to be expected. A youth without ambition becomes an under achiever, and as he grows older, develops an inferiority complex, and withdraws into himself. But as we grow old, gradually our priorities, goals and ambitions change. Oftentimes, this change is so slow and unfelt that we hardly notice it. It is just that a youth changes into a different person, with age. His outlook on life, if he cares to notice, has so dramatically changed that it takes him by surprise.
With age, we gradually begin to care less and less for what want to have, and, instead, learn to relish what we have. That bigger car, that bigger house, and that flashier life-style lose their importance. We suddenly become aware of the bitter fact that the world that we wanted to impress with our acquisitions and achievements has always been so immersed in itself that it hardly troubled itself to notice us. With this realization, we stop our futile attempts to impress the world. With this development, comes a sense of true relief and power. ‘Relief’ because we no longer struggle to impress others; ‘power’ because we now work to please ourselves, and the sway the rest of the world had over us is gone.
The question now is ‘since we now have to work for ourselves, what exactly should be our changed goals?’
This is and should be our #1 priority, as we begin to get old. We need to accumulate our ‘retirement money.’ This process should start when we reach our middle age, say 45, concurrently with our planning for the higher education of our children. Then next step is to decide the age of retirement. If one is employed, the age of retirement is largely decided by the retirement policies of the employer. It is, for instance, 60 years for central government employees. If one is self-employed like the ones who own businesses or industries, the date of retirement is something they decide. Once this age is fixed, the next step is to fix the amount of retirement fund. This amount depends on many factors: (1) the current income and the ability to save; (2) post-retirement life style; (3) status of current health and likely medical complications that come with age; and (4) hedge against huge medical expenses.
The post-retirement expenditure falls into two categories. The first of them are the amounts needed for monthly expenses – groceries, fruits, vegetables, milk and curd and so on; power and water bills; salaries to the maid, driver etc.; medicines and regular doctor’s fee and such other expenses which are to be met every month. The second category involves amounts needed for once-in-a-while or periodic expenses – travel, eating out, seasonal purchases and so on.
For the first of these two categories (monthly expenses), the most suitable options would be post-office savings schemes for senior citizens, which typically offer higher rate of interest than bank term deposits (fixed deposits). But as there are limits beyond which amounts cannot be invested in post-office schemes, the balance amount set aside for this category could be parked in bank term/fixed deposits, with either monthly or quarterly pay out options.
As regards the second category of expenses, one could consider annuities offered by various retirement funds, debt instruments, shares, and mutual funds.
Now we come to the most important question: What should be size of this retirement fund. Let me try to arrive at this amount, based on certain assumptions. The couple in question are about 70 years and they are living in Sharadindu. They are taking all their meals at the common dining room, and they do not have a full-time driver. They are living in a single BHK apartment. Typically, they spend the following amounts every month.
- (In Rupees)
(for two and all the meals ie breakfast, lunch and dinner) – 12,000.00
2. Power consumption – 1500.00
3. Monthly maintenance – 4380.00
4. Eating out etc. – 5000.00
5. Fruits etc. – 2000.00
6. Medicines etc. – 2000.00
7. Miscellaneous – 3120.00
Total — 30,000.00
Factoring inflation of 7% per annum the monthly expenses would be Rs.1,30,000.00 towards the end of 2040. (20 years). If the size of the fund is, say, Rs.1,00,00,000.00 (rupees one crore) at the end of ten years it would grow into Rs 2,60,00,000.00 at 8% p.a. The average cost of living expenses at the above rates, for twenty years would be Rs. 1,92,00,000.00(factoring in 7% inflation), leaving about Rs.60,00,000.00 for unforeseen expenses. A retirement fund in excess of rupees one crore is the surplus fund, which can be invested in higher yielding funds, such as MFs and so on, that may carry a slight risk, or in real estate like apartments, for passive income. In my opinion, investing the excess amount in real estate is the best option, as the investment in real estate have, historically, over a period of time, yielded much higher returns than non-real-estate assets, apart from generating passive rental income.
Getting Fit and Free Ourselves of Worries
Once the financial security is established, stop worrying about the future, and start enjoying the present. We have all through our lives so gotten used to planning for and worrying about the future, it may not be easy for us to start living in the present, savoring ever moment of it. The first step towards this goal is to keep ourselves fit. For this we must spend at least 30 minutes every day in aerobic activities (brisk walk will do), and simple yoga. Learn pranayama and basic meditation. Trust me, pranayama and meditation go a long way in restoring our physical and more importantly mental wellness. Mind and body are closely related. It is a fact that modern science now recognizes. The influence of the mind on our physical health is so powerful that in certain studies cancer patients in group therapy found their cancers going into remission, that the results could only be described as miraculous.
The other important aspect of physical health food that we consume. Our diet should be balanced and nutritious. While it is not wise to stop eating everything we like, and adopt some fad diet. The best foods are the ones locally and naturally grown, and the best cuisine is the one that has been part of our culinary history for ages. So continue to cook and eat what our grandparents cooked and ate. But certain modifications are, however, necessary. Make the size of each meal smaller, and avoid oily and spicy-hot food. In short, we must adopt what Ayurveda describes as sattvic food.
To Stay Mentally Active and Socially Agile
One thing I have noticed among the senior people. They spend quite a bit of time complaining how things