When retirement planning becomes too late

Time goes by and people realize in their late 40s that they have missed out on proper financial planning.

December 12, 2014 11:26 IST | India Infoline News Service
Procrastinating retirement planning is not something which is uncommon. Many people procrastinate retirement planning for their own reasons. People in their 30s give priority to their current living expenses, and then the rest goes into their children's education. Thus, there is barely left to address the retirement needs. Time goes by and people realize in their late 40s that they have missed out on proper financial planning.
So, here is the blueprint to save for retirement goals, when it is too late.
For those in 50s: People believe that they are going to live just 10-15 years more after their retirement. Given the higher life expectancy and advances in medical science, chances are in the coming years, the average life span will increase by a few years at least.  So, it is possible that at the age of 50, you still have 30-35 years more to comfortably stay alive. If one has ten years left for retirement then, they can consider hiking their investments in equity funds for a period of five years and allow it to grow in the remaining five years. In the last five years, one should save a larger percentage of investments in debt funds.
For those in 60s: People at this age should consider taking up a part-time job in order to supplement their nest egg. Also, the income earned could be diverted towards growth funds and debt funds on a partial basis. However, if one feels that they could only work till the age of 65, they should allocate a higher ratio in income and debt funds only.
For those in 70s: At 70, substantial planning might seem to be too late. Still certain measures can facilitate the management of retirement expenses. Minimizing lifestyle expenses can be considered. One can move from a bigger home to a smaller one and utilize the residual amount towards future expenses.  If short-term savings are good enough, one can also think over building a small portfolio of fixed income instruments, just in case, you outlive your savings. 

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