Post-retirement investment management is as critical as during the employment years, especially considering the escalating health costs and the desire to sustain a certain standard of living in the years following retirement. Relying solely on a monthly pension may not always suffice, given the potential mismatch between funds and rising expenses.
Quite often, retiring parents may not be well-versed in managing their investments post their working life. They might rely on a few selected financial products or simply maintain their existing investments, presuming a smooth journey. Here, it becomes important for us to proactively assist them in taking suitable actions to ensure they don’t face financial strain due to high expenses in their retirement years.
Initiating this process involves gaining a comprehensive understanding of their current investments and the one-time corpus they receive post-retirement, such as Provident Fund (PF), Gratuity, or Leave Encashment. This assessment is pivotal before recommending adjustments to their investment approach. The aim should be to create a balanced investment strategy, primarily focusing on debt products.
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Here are five effective ways to assist your retiring parents with their investments:
Post-retirement, the overall equity allocation should not exceed 20-30%. If the current allocation is higher, immediate corrective actions should be considered. Opt for a limited exposure to large-cap stocks, if necessary, and explore balanced advantage funds. These funds aim to safeguard investments while offering substantial returns that beat inflation. Such an adjustment in equity investments will lend stability to the
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