5-point financial checklist to prepare for retirement, 4 red flags to know

economictimes.indiatimes.com:

retirement? This must rank as the question that I am asked the most. These days entire evenings are spent discussing this topic, more so because many of us and our friends have stepped into our 60s. What seemed like a distant financial goal is right at our doorsteps.

So I shall make this list yet again for myself and many of my friends. First, make a list of your assets. If your earning years depended on you as the human asset that generated a steady and regular income, your retirement depends on the physical and financial assets you build with your savings.

From the gold in the bank lockers to the land you bought in some godforsaken suburb-that-never-was, make a complete list. Assign a reasonable current market value to all these assets. Add up this number.

Pat yourself on the back and feel happy. This is the list that you will work with. Second, classify your assets into three categories: the ones you will use in your lifetime, those you will leave behind for your heirs and other beneficiaries, and the assets you will give away in charity.

How much goes in which bucket is entirely up to you. Gone are the days when parents simply used the income from assets and kept the principal amount untouched to leave it behind for their children. This simplistic approach worked when the assets were not sizeable, the investment options were limited, and fears about outliving the assets were dominant.

Sit up, and be smart and strategic about your assets. Third, implement the strategy for the first bucket. The portion that you end up using will have to be invested for both growth and income.

You must be clear that you plan to exhaust this portion in your lifetime. It is yours to use. Plan to get an income from it and invest a portion