Living On Her Own Terms

It was by choice. Being an only girl child, Ruchi Sharma decided to take care of her parents, instead of embarking on a married life. She was unsure about her partner or husband’s support when it came to taking care of her parents and fulfilling her duties.

She does not have any remorse for her decision. “It was purely out of love. My close ones tried to convince me but I wasn’t ready to leave my parents alone,” says Ruchi, who works as a fashion designer in New Delhi. She confesses that all her finances were taken care of by her father but last year she lost him in Covid complications.

Ruchi is in her late 40s and just has one more decade of work before she is formally retired. She has knitted plans to enjoy life but is unsure if the finances will support her dreams. Also, if it is too late.

Just a few kilometres away, Rashmi Khandelwal is a single mother of a daughter. Her needs are very different from Ruchi’s but the goal remains the same – retirement with independence.

According to the 2011 Census, the number of single women in India has grown over 39 per cent between 2001 and 2011 from 51.2 million to 71.4 million. They include widows, divorcees, spinsters, and those separated from their spouses. The number is expected to have risen exponentially in the last decade with changing lifestyle and professionalism.

According to financial planning experts, one should focus on the corpus they would require for their post-retirement sustainability. The three main factors to consider are the number of years left for retirement, expected inflation rate, and desired monthly expenses in retired life.

For calculating the retirement age, you can subtract your age from your expected or targeted age of retirement, while the inflation could be bracketed between 4-6 per cent per annum. The monthly expenses should include the inflated value of current expenses. After considering these three factors, a woman should consider the estimated return to achieve the desired retirement corpus. The returns will depend upon the kind of asset allocation they choose for their investment. If it is aggressive, the expected return can be around 12-14 per cent, for a moderate return, it can be around 10-12 per cent, and for a conservative return, it can be around 8-10 per cent.

“There are some must-haves and have-nots, especially for single women with no family to take care of. For example, it is good if they own a house, but I do not suggest they invest in real estate at all. My thrust is on assets that are quick to get rid of, like gold,” says Financial Planner Amit Sood. While planning their retirement, the rent until the average age of 80 is accommodated by him.

“I ensure five things for my clients who are single women. A corpus to take care of their retirement expenses, health insurance with higher coverage, a pension plan, travel expenses so that they enjoy life and a will to ensure all they own has an heir or has a logical end,” he says, adding that he tries to focus on a holistic and carefree retirement experience as most of his women clients had seen a tough and struggling time during their youth.

Radhika Gupta, MD and CEO of Edelweiss Asset Management Limited (EAML), suggests that one should stick to her goals while investing in volatile markets. Second, chase quality. Third, don’t follow the crowd. I think these are times when the fear of missing out kicks in, and your choices end up getting influenced by your friends or neighbours, even though it may not be a fit for you. And fourth, don’t panic.

Financial experts believe that challenges for single women are going to be more with the Covid-19 crisis and if they haven’t started planning their finances yet, they should not delay any further. The markets are at an all-time high and with salary cuts and job losses on the rise, single women should spend judiciously to ensure their financial independence.

jyotika@outlookindia.com