Retirees should be mindful of inflation, and health-related expenses that can crop up later and maintain an emergency fund at all times
As part of Aditya Birla Sun Life Mutual Fund’s Investor Education and Awareness initiative, in association with Outlook Money, the latest episode of the Retire Right Series discussed the nuanced topic of how to deploy one’s retirement corpus. With retirement being a multi-decade phase, the panellists emphasised that it is not only essential to accumulate a corpus but equally crucial to manage and deploy it effectively for sustainable, stress-free financial independence.
The discussion kicked off with Nidhi Sinha, Editor of Outlook Money, who highlighted the importance of this distribution phase. She said: “Imagine spending a large portion of your corpus on travel right after retirement and facing financial strain later in life. This is what makes it necessary to divide the corpus wisely.”
K.S. Rao, head of Investor Education and Distribution Development at Aditya Birla Sun Life Mutual Fund, stressed the need to plan methodically, “Think of retirement as the ‘golden phase’—a time to let your corpus shine. But for that, you must G.L.D: Gainfully engage, Live a lifestyle within your corpus, and Discipline yourself to maintain cash flow.” He also advised building an emergency fund to handle unexpected expenses without disrupting the long-term plan.
Suresh Sadagopan, Sebi-registered investment adviser and Founder of Ladder7 Financial Advisories, warned against the “slow poison” that is inflation and how it can significantly erode purchasing power over time. “A corpus of ₹1 crore today could lose two-thirds of its value in 30 years,” he said. Sadagopan also urged retirees to avoid aggressive investments in fixed-income products, which could leave them vulnerable to inflation risks, advising a safe withdrawal rate of less than 5 per cent to ensure longevity of funds.
Meanwhile, Suraj Kaely, Founder of Reflect & Grow, emphasised the behavioural challenges retirees face, such as anxiety about spending from their savings. “Many retirees are asset-rich but cash-poor,” he observed. “We often recommend keeping some liquid cash aside, as it offers psychological comfort and prevents panic during emergencies.”
The panel discussed multiple risks, such as healthcare costs and longevity, with Rao pointing out, “Healthcare expenses are unpredictable—just one medical emergency abroad can wipe out savings.” Kaely recommended setting up a separate health fund, ideally matching one’s insurance cover, to handle unforeseen medical expenses.
In conclusion, all three experts emphasised starting retirement planning early, maintaining discipline, and consulting financial coaches to navigate unexpected challenges. As Sinha summarised: “Planning with purpose is the key—start early, plan wisely, and make your money last.”