To catch up at 60 with someone who has been saving Rs 50,000 a year from 30, you will have to save Rs 4 lakh a year. The flip side is that it may now be easier to bear the higher cost. Says Sumit Rai, senior vice-president and head of health and retirement, Max New York
Life Insurance: “At 50, most of your liabilities, such as home loans, would be paid off and your income would have risen.
So, you should have more to save.” Your investment options range from debt (for example, Public Provident Fund), to equity heavy options (for example, pension plans from life insurers and mutual funds). Unit-linked plans are cost-effective if you invest with caution. Says Pranav Mishra, senior vice-president and product head of ICICI Prudential Life Insurance: “With 8-10 years of service left, it’s not late. Of his savings, 60-70 per cent should go towards retirement planning. He can begin with an initial exposure of 50-60 per cent to equities and cut it as he nears retirement.”
If you are falling short of your target investment, you could try increasing your income through part-time work, or, in the worst case, extend your work life. In a manner of speaking, any time short of the day you retire is a good for planning your pension. And while you are at it, make sure you have life cover and health cover for your family.
