Retirement Plan: Silver Hair, Golden Pocket

There was a man who had four sons. Being an amazing father, he had fulfilled all the needs and wants of his children. He was a proud parent and had full faith in his children. The man was about to retire when one of his sons demanded a car. Without even thinking once, he told his employer that he would like to withdraw the entire amount from his gratuity fund. The employer who is aware of today's scenario asked the man to think and take a wise decision as he is about to retire and will require this money during his retirement. But the man being overconfident of his children taking care of his financial needs, withdrew the entire amount and gave it to his son. Later on, when his sons were settled in their own lives, he informed them that he and his wife want to live their retired life by spending time with their family and particularly their grandchildren.

This sounds like a perfect life and retirement. But the irony is that this man had the most difficult retired life although he had four children to take care of him. Let's see what happened with him.

Since he had withdrawn all his retirement funds to fulfill his son's want; therefore, he was left with no money and none of his children was ready to bear their parents' expenses. He and his wife became burdensome for his sons. In his old age, when he needed his wife the most, he was separated from her by their children.

This story might sound similar to most people as this is the storyline of a very popular Bollywood movie "Baghban” starring Amitabh Bachchan. The movie completely represents the need to plan retirement wisely.

Now consider a different scenario of this same situation. If the old man had not withdrawn his gratuity amount and had a regular flow of income, then he would have been able to live his retirement life with his wife without being dependent on his children. He would have not become a burden for his children.

One of the important stages of life, which needs careful planning, is retired life. A lot of factors have led to change in the thinking and lifestyle of a retiring person. Now people want to enjoy their life to the fullest without any financial dependency. But here one cannot ignore the fact that old age comes with a lot of medical issues. Though due to the improvement of the medical sciences, most of the problems are curable this brings in a requirement of a lot of funds to bear these expenses. And also, due to improvement in the medical sector, the longevity of the people has increased which brings in the need for retirement funds for a longer period of life.

The longer educational span and reduced retirement age because of a fall in efficiency and productivity have led to a reduction in the working span of a person. This has further made it difficult to plan for a longer and comfortable retired life.

Today's youth needs to realize the need for starting a retirement plan early in their working lives. To improve the quality of life, they are becoming obsessed with their current wants. It has become important to make them aware of the concept of savings and planning which are the two most important aspects of wealth creation for retired life.

Conclusion

Retirement Planning is an integral part of the financial planning of each individual and the quantum of the proportion of the financial plan that will go towards retirement planning will depend upon several factors based on individual's needs and desires. The planning should start early and wisely.

Written by Priyanshi Jain (Guest Contributor)

References

1) https://www.investopedia.com/terms/r/retirement-planning.asp

2) Madura, J. (2017). Personal Finance. Pearson Publications