Secure your future today: Here’s five reasons why retirement planning can’t wait

Secure your future today: Here’s five reasons why retirement planning can’t wait
CA Ashish Modani, CFP, Founder - SLA Finserv Private Limited
Retirement is a non-negotiable phase in one’s life – one where the absence of financial planning can lead to distress. To understand the seriousness of retirement planning, let us delve into these five pivotal aspects.

1. You might even live till 90: The trajectory of life expectancy has shifted dramatically. Did you know that just 100 years back, the average age of Indians was just over 20. At the time of independence, the average age was 32. Fast forward to 2020, it stands at72. In fact, an urban Indian lives 4-5 years more than a rural Indian. The ability to live longer is not because we have started living healthily, but due to the advancement in the medical field. Healthcare has advanced exponentially and become an integral part of our life. Forecasts indicate that the average Indian age could soon touch 80, underlining the need for comprehensive retirement planning.

2. Is 50 the new 60? In this tech-driven era, work paradigms are evolving. Whether you go to any bank, IT company, start-up, pharmacy, or any other business which belongs to the private sector, how many people do you see above the age of 50? Not many. As technology advances, the way we work is changing at a fast pace. “Experience” which was once a prized asset, no longer guarantees stability. Economic life cycles are shortening, compelling individuals and businesses to adapt or eventually exit. The adage “50 is the new 60” is increasingly relevant, which shines the spotlight on the need to prepare for alternate livelihoods or income sources during retirement.

3. Rise of the Nuclear Family: In the 1980s, we saw a culture of joint family. 15-20 people used to live under one roof. Work used to get divided among the family members. In recent times, family structures have evolved from joint households to compact nuclear units. The traditional support network has diluted, placing more pressure and responsibilities on fewer shoulders. . Women, traditionally have been financially dependent, and now see the rising need to redefine their roles and financial independence. And with the concept of a nuclear family poised to endure, securing financial stability has become even more important.

4. Returns are heading south:
Financial landscapes are shifting, with interest rates on the decline while expenses surge. With every passing decade, interest rates on bank Fixed Deposit are getting lower by 2% on an average. By 2040, we may see low single digit returns and by 2050, the interest rate could be nearing 0%. On the other hand, a doubling of household expenses is projected for every passing decade, thanks to the effect of inflation. A little introspection of one’s own expenses a decade back will lay bare the reality. Similarly, consider the returns on bank interest rates and the picture is bound to be grim – giving rise to the importance of investment and savings strategies.

5. Taxation trends and environmental impact:
Global warming is bound to have a major impact on our finances. Governments all over the world are struggling to deal with this aspect, and over time the impact is going to be adverse. As a means to deal with the potential fallout (calamities), governments are likely to add additional taxation like the Swachh Bharat Cess. The incremental money various governments will need to spend will come out of the pocket of its citizens.


Connecting these dots, it becomes evident that retirement planning is crucial. With rising healthcare costs and waning interest rates, the strain on financial planning is increasing. In the United States, individuals are extending their work lives due to insufficient savings – a scenario that we must aim to avoid in India.

Thus far, the government owing to the increased population has been forced to change their pension policy from guaranteed benefits to market linked benefits. However, it is time we take note of the increased life span and the real danger of running out of money during retirement. If you wish to lead a comfortable retired life, it is imperative to start saving early on in one’s working years and spend less on the current wants such that there is enough saved to address the future needs.

In summary, the changing tides of life expectancy, work dynamics, family structures, financial landscape and evolving tax trends collectively emphasise the need for early and thoughtful retirement planning. And by taking charge we can pave the way to a secure retirement with early savings and prudent spending.

Disclaimer: The article is authored by CA Ashish Modani,CFP,Founder-SLA Finserv Private Limited. The opinions expressed are those of the author and do not necessarily reflect the views of Business Insider India. Do your own research (DYOR) before deciding to invest in any financial asset class: