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How to enjoy smooth retirement despite inflation

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How to enjoy a smooth retirement despite inflation
September 26, 2022

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Planning your future is a subject which is better said than done. As per a survey, nine* out of ten Indians seem to be under-prepared or unprepared when they reach retirement. Retirement does not come to them naturally; it just hits them hard as they do not have any alternative source of income to keep up the lifestyle and sustain.

Be rest assured, here are four ways to prepare for retirement in advance

  1. Suitable mix of equities and debt instruments

    Never put all your eggs in one basket. The Thumb rule to diversification suggests suitable allocation to your debt portfolio depending on your age. As you age, the allocation to equities reduces, thereby, reducing the portfolio risk and focusing more on sustainable consistent cash flows.

    The rule suggests that your age should be subtracted from 100, the output there should be the allocation percent to equities and the balance in debt instruments. For example, if you are 40 years old, 100 minus 40 = 60% can be allocated to equities and as you move closer to retirement, the portfolio rebalancing will lead to higher share in debt instruments.

  2. Invest in a retirement plan

    The safest and the simplest way is to invest in a retirement plan when you have a few years ahead of you. One such plan is offered by HDFC Life is the HDFC Life Pension Guaranteed Plan. The safety net at the time of retirement is having a regular cash flow when your income stops but the expenses continue. HDFC Life’s Pension Guaranteed Plan offers lifelong regular income post retirement for life.

  3. Create regular stream of cashflow/income

    All your life, there is a balance between your income and expenses. As your income increases, your standard of living also increases and hence, you are accustomed to a certain lifestyle. At the time of retirement, suddenly, the balance is distorted because income stops but the expense outflow continues.

    It is important to invest early on to create a regular stream of income for your daily needs, investments, expenses as well as leisure activities, post retirement as well.

    The regular stream could be in the form of regular interest income, dividend income, rental income or any other source of passive income.

  4. Ensure that you have a health plan

    You may not be in your prime health condition in your sunset years. This may be your biggest expense when you start getting older. Medical and hospital expenses can take a toll on your savings especially in your old age. Health insurance plans are cheaper when bought earlier in life. So, it is very important to purchase a health plan as early as possible so as to cover for the hefty cash outflows for medical contingencies. HDFC Life offers the Click 2 Protect Health Plan, a life and health insurance plan that gives your family all-round protection.

Conclusion

HDFC Life offers a range of exclusive and comprehensive retirement plans and pension schemes that are directed towards ensuring your financial independence even after you retire.

(* Source : https://timesofindia.indiatimes.com/business/india-business/nine-out-of-10-indians-feel-unprepared-for-retirement-survey/articleshow/78773661.cms)

ARN: ED/08/22/28529

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.

Disclaimer

Click 2 Protect Health (UIN: 101Y115V05) is a Term & Health Combo Plan. The risks of this product are distinct and are accepted by respective Companies. For more details on risk factors, associated terms and conditions and exclusions, please read sales brochure carefully before concluding a sale.

HDFC Life Pension Guaranteed Plan (UIN: 101N118V11) is a single premium non-participating and non-linked annuity plan. For more details on risk factors, associated terms and conditions and exclusions, please read sales brochure carefully before concluding a sale.

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