About to Retire? Play Safe

Your portfolio needs to generate enough returns to support your lifestyle.

When you are close to retirement, there are many concerns. The critical one is ensuring that the retirement corpus that has been created over the year is safe. But the tricky part is that the portfolio also has to generate enough returns to beat inflation and give regular income.

Hemant Rustagi, chief executive officer at Wiseinvest says one should realign the portfolio. “You have to assess your monthly expenses and see if the pension is good enough to take care of them.” If you have to be dependent on returns from the corpus for additional income, it has to be invested in a manner without harming the principal amount.”

What makes planning for a retired life a lot more difficult is that life expectancy is on the rise. Says Vishal Kapoor, director & head (wealth management), Standard Chartered Bank, “The general tendency of people in this age group is to cut out all the risky asset classes from the portfolio. But being completely conservative is not a good idea, considering that you will have to plan your portfolio with at least 15 to 20 years in mind,” he says.

Say, your portfolio is worth Rs 1 crore at the age of 49 years with equity constituting about 70 per cent. But as you grow older, the ability to take risk comes down significantly...(Read More)