8 Retirement steps at 50!
Let us say you are 50 years of age and you think that you have another 5/10 years for retirement. What are the steps to take?
First question is how can you be sure that you will retire at 60 years of age? Well you can’t. Hence you do not know whether your retirement is 5 years away or 10 years away. In fact if you are still short of your corpus, you may have to look for a job in a company that will keep you till you are 65…which will create a bigger corpus. Let us look at some of the steps that are required.
- Get the numbers for real – you and your spouse “thought” that your monthly expenses would be Rs. 50,000 per month, but however it is already at 45000 at your age of 50, so it is more likely to be Rs. 100,000 per month when you are 60 years of age, get real.
- Make sure that your medical insurance – the basic, the top up, the super top up are all in place. This is a good age to buy and add to your medical insurance. Maybe you can complete the buying at age 58 – and completely move away from the company provided medical insurance.
- It should be time to review your life insurance – for many of us at 50 our kids could still be in college and hence some life insurance maybe appropriate. Check for the right amount of life insurance, critical illness insurance, etc.
- Pay off all your loans – home, car, ….whatever. It is nice to go into retirement with a zero debt balance sheet.
- Get active in your school group, college group, relatives, hobby groups, building society….these are the people whom you will be socializing with soon. Such groups are very useful – you help the 70 year old and mentor the 30 year old. When you turn 70 – the 30 year old you mentored is there to help you – and the cycle continues. You could teach, mentor, do career guidance, become an agony uncle (aunt), help with investing, you need hobbies and friends.
- Start looking for “senior citizen homes” – the place where you will stay from the age of 70 till the age of say 85. After that you will need to stay in a place that gives geriatric care – you can start shopping for that place when you are 75, but broadly you should have an idea. At age 70 you might like to live in Pune, but at 85 years of age you may want to shift to a warmer climate like Kalyan or Vasind. DO NOT BUY NOW, but only at age 65 if you want to move in at age 70. Start looking for options, you have a lot of time to finalize and close.
- Remember you will soon be moving from the accumulation stage to the withdrawal stage soon. The skill sets required are very different now. Learn about “Investment buckets” etc. The difference between accumulation stage and withdrawal stage is like putting a man on moon and bringing him back. Completely different skills. However you can’t put a man in space till you know how to bring him back.
- Get your portfolio ready for withdrawals – keeping money in different buckets, learning about ‘sequential returns risk’ etc. is an important step. You should also share your login and pw with your spouse, make a will (good sensible thing to do at any time), ….there will be more. Here are 8 of them…
