Retirement must be thought through was the voice in my head while attending “A Discourse on Retirement Planning by Industry Experts” hosted by wealth management firm Capital League on the occasion of its 20th anniversary on a sunny Saturday morning in Delhi. Attending the session was quite an eye-opener to a world that many dread, some ignore and a few plan well.
With life expectancy having shot up, many live till their eighties and nineties, making retirement a good 20-30 year long span, if not more. That’s precisely why one needs to have enough clarity before deep diving into nuanced retirement planning, given a lot of that planning will decide the course of one's future lifestyle. Waxing eloquent on this, Sapna Narang, Managing Partner, Capital League, said, “Clarity is be-all before you embark on your retirement planning. The kind of household expenses you have, the lifestyle you prefer, the cost of vacations---one needs to have a broader view of all of this to be able to plunge into retirement planning. In fact, for advisors such as us, we need to ask very many questions to crystallize the right plan for our clientele and a lot shall depend on individual circumstances and expectations.” Narang, who manages varied clients, further added how factoring in inflation is indispensable to planning for the future in a world where growing inflation is something we all grapple with. With analogies, Sapna zeroed in on the broad parameters to be considered, “Get the hang of your monthly expenses, be cognizant of inflation and then be aware of the kitty that finances all of it to be able to provide for the expenses and save enough while growing simultaneously.”
Bringing a dash of wit and humour to the sun-soaked panel discussion on a chilly afternoon, Radhika Gupta, managing director and CEO of Edelweiss Mutual Fund, mentioned how her father, who is 75, invests 90 percent of his portfolio in equity while she herself at 40, has only half of her portfolio invested in equity. What Gupta made abundantly clear while busting stereotypes and conventions was the need to look at a customized approach that is largely determined by one’s lifestyle, priorities and requirements. She went on to further elaborate on how, even today, very many HNIs still hold on to mutual fund and equity bias while clinging to income from ancestral property, underlining the volatility associated with such dependence and how one needs to make a journey to rethink pension planning altogether.
Through the discourse what stood out clearly was the need for prioritizing right. While inching close to retirement age, many are aware of the big money coming their way, while for many, wealth is scattered across several pockets. To bring method to the madness, what remains essential is to consolidate all sources of income and then make sense of how to channel it best to meet your requirements. And it’s in this grind that you need the advice of a wealth management consultant to safely navigate a world where uncertainty cannot be afforded.
The only gentleman present at the power packed all women panel, Kailash Kulkarni, CEO of HSBC Mutual Fund, highlighted the need for safety for a secure future with the famous dosa anecdote, popular in financial circles. His two cents for the audience were simple and loud, “If you do not know it and if you do not understand it, don’t go for it.” Referring to bitcoin investments, he mentioned how someone lost a fortune in a single night’s time and that, therefore, people with an appetite for risk must mindfully weigh the cons before taking the plunge. “Striking the right balance between growth and safety is important to bring stability to your retired life. You can’t afford to lose a big portion just by fancying a risk,” he concluded.
Sumera, Vice president of SBI Mutual Fund and a well-known television personality, summed it up right by saying, “It's not just enough to have a good plan, but to ensure that it passes the test of time.” Sumera played devil’s advocate by asking all the tough questions and catalyzing panellists to reveal beyond the brief. Her analogy of an investor’s wife whose husband suddenly passed away, leaving her amidst ambiguity and cluelessness as she grappled with a huge fortune invested in equities, got the audience and panellists alike thinking.
A key takeaway from the panel was how attention to various details can be life-changing in certain circumstances. Ensuring various accounts have a second signatory, nominations are in place, passwords are noted, and a Will in place to mention all assets and inheritors can make life easier and saner for immediate family in the instance of any sudden mishap.
In a nutshell, the discourse busted conventional thoughts, unboxed stereotypes and demystified planning so that retirement can be the start of new beginnings.