Wondering what should be your investment strategy 10 years before retirement? Here is what Dhirendra Kumar suggests
I am retiring after 10 years. What would be the best investment strategy for me?
Save and invest as much as possible. Be in equity to the hilt till two to three years before retirement. So, you have seven years more to be substantially in equity. But this is of course after having the basics in place. Have an emergency fund, health insurance and term insurance according to your requirements. So, invest in equity to the hilt after having the basic foundations in place.
Three years before the retirement, sit down and plan how much annual income you will require and your expectation from the accumulated amount. Plan accordingly. The basic principle is pretty straightforward. As you get closer to the goal and need money for consumption, it should be moved to a safer asset class. So, two to three years before you retire, you should move the income requirement for one to two years to a stable asset class. For simplicity, just start keeping income required for the next one-two years in a fixed-income fund. Alternatively, you may also consider something like the Senior Citizens Savings Scheme and Post Office Monthly Income Plan to support the essential guaranteed income requirement.