You shouldn’t be basing your savings decision on the notion that your sons and daughters will take care of you in your non-earning decades
The casual approach that many people have about retirement
saving is such that it seems as though either these people are certain they
won’t live long enough after retirement or assume their children to be their
retirement plan or fallback!
Let me share a real-life story.
Stretched finances
A friend of mine is the sole earning person of a six-member
family (father, mother, his wife, and four-year-old twin children). He once told
me that he was under immense pressure to take care of the family’s expenses and was
just struggling to make ends meet. And at times, he really felt frustrated that
his parents did not have any money saved up to support them even partially.
Though he was thankful that they did everything to raise him, he also felt that
if they had some money saved up, things would have been a bit easier for him.
They are now fully dependent on him. My friend confessed that with parents’
rising medical expenses, which had become recurring monthly expenditure, he was
now regularly running out of money much before the month ends. I had absolutely no
doubt that he was feeling helpless and finding it tough to manage things.
Don’t depend on
empathy
And it is entirely possible that at least some of these
‘loving’ children may become less empathetic or compassionate towards their
parents. There are thousands of over-filled old-age homes for a reason.
So just forget about the ‘I took care of them when they were
young, and now they should do the same when I am old’ logic.
If you still haven’t given retirement any thought, then
please do so. Here are a few steps to consider.
- Like everyone, you too have many goals. But keep retirement saving separate from all other goals. This ensures that you give retirement the importance it deserves and also does not dip into it for other goals. Remember that unlike other goals, you won’t get any loan for retirement.
- Your provident fund savings won’t be enough. You need to save more. And the earlier you begin, the lesser you will need to set aside every month. To begin saving for retirement early even if it feels one or two decades too early (i.e., begin in your 30s/40s).
- As your income increases, try to increase your monthly retirement saving as well every year or once in two years.
- Make sure you make equity apart of retirement savings, as it can give good inflation-beating returns in the long run. Use the equity funds route to creating your retirement portfolio (which also includes your EPF, NPS (national pension system) and PPF (public provident fund)).