Here's how you can be confident and sail through your golden years without any worry
17-Jun-2022 •Dhirendra Kumar
Just as I sat down and started thinking about what I must say about retirement, I saw this headline: 100-year-old Brazilian breaks record after 84 years at the same company.
Brazilian Walter Orthmann joined a company named Industrias Renaux on January 17, 1938, and 84 years later is still working there. I guess the greatest achievement here is that at the age of 100, he is still active and alert and still enjoys working. In the article I read, here's the advice he gives, "I don't do much planning, nor care much about tomorrow. All I care about is that tomorrow will be another day in which I will wake up, get up, exercise and go to work; you need to get busy with the present, not the past or the future. Here and now is what counts."
You should search Google for news stories about this man but it goes without saying that this kind of 'retirement solution' is not on the cards for most of us! Retirement is a scary thing. By the time salaried people reach that age, they've typically been working for close to 40 years. For most of them, their existence is pretty much defined by the routine of their jobs. More importantly, their finances are defined by getting that salary every month.
Our cover story for Mutual Fund Insight July 2022 issue is about how to retire rich, which is of course one half of the problem. The other half, which too Value Research has been tackling for decades, is how to stay rich (or at least comfortably prosperous) after retirement. Over the two or three decades of postretirement life, a lot can happen.
Except for the small number of people who have an inherently inflation-protected income - for example, rent or a government pension, or those who have generated enormous wealth during their working years - the spectre of postretirement financial problems and impoverishment haunts most retirees. Nowadays, lifespans are long and most people have two or three decades of lives left at retirement. During these long years, a lot can happen. For example, even though lifespans have become long, the rise of chronic diseases has meant that 'healthspans' have become short and many of us will face ruinous medical bills at some point in the latter part of our lives.
The inherent fear and risk that comes with retirement means that it's a natural instinct to be conservative with post-retirement investments. This is perfectly understandable. Once you stop earning, there is no escape hatch. If you make some losses in your investments, then that's a one-way street - you will not be able to earn more and make up for that. This makes people extremely conservative in their outlook. A considerable number will trust only bank deposits, sovereign schemes and perhaps LIC.
The problem is that your savings can face a sudden, hard disaster or a long, gradual one. Like the proverbial frog in boiling water, the latter cannot be felt. Those who face this long, slow disaster do not even know that there was an alternative.
Actually, there is an even bigger irony. I've come to realise that there are those who choose this disaster knowingly. How so? I've spent years explaining that after retirement, equity is a must in order to avoid this slow disaster. There are those who understand this very well and yet are so scared of the quick disaster that they willingly choose it. This is the worst of all worlds, and it comes entirely from a lack of confidence.
How can you gain this confidence? That's where Value Research comes in. Confidence comes from knowledge and understanding, and those are the real products that Value Research can supply to you. This magazine, everything on Value Research Online, and most of all, the tools and analyses available on Value Research Premium, they all have this one single goal: while you are earning, and after you have retired, have the knowledge to do the right thing, and the confidence to know that you are doing so.
Suggested read: A simple plan for post-retirement income
This editorial appeared in Mutual Fund Insight July 2022 issue. To read the cover story and other insightful analyses, columns and articles