Spending at ease in retirement: Follow these 5 rules to grow your savings at all times
retirement planning have changed. It is old-fashioned to seek pension from the government and live an entitled life. Many investors prefer to take matters into their own hands.
They began with IPOs in the 1980s and soon graduated to equity mutual funds. My cousin saved and invested aggressively in her earning years, which is why her retirement corpus has grown sizeably. Retaining the focus on growth in corpus value over a long haul of 20-25 years of saving is important.
Many remain conservative and invest in fixed-income instruments, such as bank recurring and fixed deposits, bonds and post office schemes, among others. They buy into the fear that their retirement corpus should not be subjected to the risks of the equity market.
This bias towards debt products leads to a compromise in the accumulated value of their corpus. The longer the time period, the greater the opportunity lost.
There is no denying that equity investing is riskier than debt, and that higher return comes with higher risk. However, there are tools like diversification to manage those risks and earn market returns. Investing in a portfolio of equity stocks, managed to be diversified, monitored to be invested in companies that are performing well, is not difficult.
One can create such a portfolio and manage it actively; one can buy a diversified equity mutual fund; or simply buy an equity market index holding a diverse set of stocks.
In all these cases, the market risk of being exposed to equity still remains. This is addressed by staying invested through bull and bear market cycles. This is a cultivated preference, now mastered by thousands of investors, like my cousin, who invests in equity indices and mutual funds.
