How To Create A Sustainable Retirement Income And Maintain Tax Efficiency, Bharat Pareek Decodes

As your life changes after retirement, it becomes difficult to fill your time due to the absence of a concise routine. Bharat Pareek; Head Product and Segment (private wealth management) at ICICI Securities, in his speech at the 2nd 40After40 Retirement event, talked about the importance of determining how you will utilize your time after retirement. Determining various factors like how much time you are going to give to your hobbies, what philanthropic work you will you do etc. As one needs to fill up to 12 hours in a day after retirement, it is suggested to think of how you are going to fill this time. Pareek emphasized on determining your ambitions and setting clear goals and purposes in order to achieve them. “First and foremost, you need to determine what you want to do in your life, it’s always a purpose. If you don’t have a purpose, you’ll be like a headless chicken, hitting everywhere without anyplace to reach,” he added.

“If you can take care of basic fundamentals, you will easily be able to plan retirement,” pareek said. These fundamentals are the important factors that you need to consider to get to retirement and then proceed to create a corpus by estimating your monthly expenses, including health, travelling, philanthropic work, hobbies, kid’s education, retirement period, life expectancy, etc., while factoring in inflation. This will help you get the basic idea of how much you need to invest. As many people make mistakes in properly considering these expenses and especially forget to consider the inflation, they save only a small amount which is not sustainable through retirement.

He presented a basic structure for sustainable retirement planning to understand the key steps. Primarily setting clear goals to create a vision and ascertaining its risks is important to start portfolio planning to execute it smartly. It is also important to review this portfolio after a major life event, i.e. after marriage, increased salary, etc., and rebalance it with the risk you are taking with how much money you will need in your corpus. It is important to define how you review your portfolio. Pareek highlighted review does not mean that you pick up your phone every day to see the value of your corpus, that’s just looking at the data. The more you review; more impulsive you become which will reduce your risk taking ability as it will give you anxiety. You need to see if what you have is sufficient and if not plan your execution properly.