You think you are ready for retirement ! The Lady of the house may disagree….

Imagine you are close to your retirement age. You think that with all the diligent efforts throughout your life, you have managed sufficient  balance in bank to retire comfortably. But, your wife is not on the same page. She worries about running out of savings due to inflation and emergency expenses. Therefore, she thinks that it is too early to retire and that you should continue to work bit longer. You have discussed the numbers with her, and yet she wouldn’t get comfortable with the idea of retiring soon.

This situation brings up an issue that often gets overlooked in retirement planning….the financial & mental burden that women carry in the later part of life.

The least that we need to appreciate is that you and your wife are candidly discussing the financial matters (so many don’t..). Secondly we need to admit that your wife’s response to your early retirement plan is not at all strange. A lot, in fact the majority, women think the same….and not just in India…but everywhere in the world. A recent US survey found that nearly 52% of older women are worried about outliving their retirement capital. Nearly 58% worry that they may lose their financial independence and would need to depend on children.

The roots for such worries are perhaps lying in longevity of life and high medical expenses. It is a pity that the blessing of living long due to advancement in medical sciences is being undone by high medical costs. Statistically, women tend to live longer than their male counterparts….3 to 5 years on average. The fear of living alone in the later part of life is fearsome indeed for majority of women.

Whether a retired couple will outlive their savings will depend upon several factors. Four most important of them are:

  1. The initial capital that they bring to the table for retirement.
  2. Their lifestyle during retirement. This has a lot to do with where they chose to live and what kind of social / physical lifestyle they maintain.
  3. How their investment portfolio is managed during the retirement phase. Sometimes, even a small mistake can seriously impact the financial security.
  4. Are there any extra ordinary medical conditions that will eat into the resources ? This becomes a leaking bucket.

If you have attempted to quantify the above needs with sufficient margin of errors, further backing it up with well-planned insurance coverage, and kept a check on expenses, then there is sufficient ground for you to convince your wife. If she is still not convinced, quite possibly there are some chinks in the armour which should get addressed. This situation calls for a healthy discussion between you, your wife and a retirement specialist advisor (only seasoned….don’t invite a rookie..) who can throw light from different perspectives. He will stress-test your preparedness for various unknown situations.

Actually, there is no magic formula to arrive at how much is enough for retirement. A person who retires to mountain would need much less. But if you want to fulfil all your left-behind dreams, you better plan it well ahead.

Avatar

By Sameer Rastogi

18 years of experience, PG in Finance and has delivered Wealth Management lectures at IIM Lucknow, IBS Gurgaon and IIPM Delhi. Contributed to various newspapers. Strength – Application of Economic fundamentals to Investment

Leave a Reply

Your email address will not be published.