आप जानते हैं नेशनल पेंशन स्कीम (NPS) क्या है.

Capitalstars Investment Advisor

इस योजना में अपने रिटायरमेंट के बाद के जीवन के लिए निवेश किया जाता है. व्यक्ति के निवेश और उस पर मिलने वाले रिटर्न से एनपीएस खाता बढ़ता है.

हर नौकरीपेशा की नौकरी के कुछ साल में यह चिंता हो जाती है कि आज तो ठीक है, लेकिन जब नौकरी नहीं होगी तब आय कैसे होगी. यानी रिटायरमेंट के बाद की आय की चिंता. इसका समाधान एनपीएस (नेशनल पेंशन स्कीम) के जरिए किया जा सकता है. एनपीएस का मतलब है नेशनल पेंशन स्कीम.

एनपीएस एक पेंशन योजना है. इस योजना में अपने रिटायरमेंट के बाद के जीवन के लिए निवेश किया जाता है. व्यक्ति के निवेश और उस पर मिलने वाले रिटर्न से एनपीएस खाता बढ़ता है.

रिटायर होने के बाद इसी पैसे से सरकार पेंशन देती है. यहां पर रिटायरमेंट की उम्र को 60 साल माना जा रहा है. रिटायर होने पर या 60 वर्ष की आयु के होने पर खाता बंद करने का विकल्प होता है. खाता बंद करते समय एक मुश्त या जरूरत के हिसाब से रुपया भी निकाला जा सकता है. बचे हुए पैसे से एक वार्षिकी उत्पाद (annuity plan) खरीदना पड़ता है. ध्यान दें पूरी राशि का इस्तेमाल भी एन्युटी प्लान भी खरीद सकते हैं. एन्युटी प्लान (वार्षिकी) क्या के तहत एक बीमा कंपनी को एक मुश्त पैसा दिया जाता है और इसके बदले वह कंपनी पूरी ज़िन्दगी पेंशन देनी की व्यवस्था करती है. इसे ऐसे भी समझा जा सकता है कि अगर इस खाते में 10 लाख रुपये हैं और उस समय ब्याज 6 प्रतिशत है. कंपनी 10 लाख रुपये लेकर आपको आजीवन हर वर्ष 60,000 (10 लाख X 6%) रुपये देगी. अगर मासिक आय का विकल्प चुना जाता है, तब हर महीने 5,000 रुपये मिलेंगे.

एक बात और, वार्षिकी या एन्युटी प्लान कई स्वरूप में आते हैं. जैसे की आप चाहें तो आपके बाद आपके पति या पत्नी को भी पेंशन जारी रह सकती है.आप अपनी ज़रूरत के अनुसार विकल्प चुन सकते हैं.

एनपीएस में चार सेक्टर होते हैं
एनपीएस खाता खोलने के कई तरीके हैं. आप किस तरीके से खाता खोलते हैं, उस बात से तय होता है, कि आप कैसे एनपीएस के तहत आते हैं.
केंद्रीय सरकार के कर्मचारियों के लिए
राज्य सरकार के कर्मचारियों के लिए
निजी क्षेत्र के कर्मचारियों के लिए
आम नागरिकों (सिटीजन) के लिए

हकीकत यह है कि इन खातों में ज्यादा अंतर नहीं है. अगर नियोक्ता से भी योगदान चाहिए, तो उनके अनुसार एनपीएस खाता खोलना होगा या फिर पुराने खाते की जानकारी देनी होगी. सरकारी एनपीएस खातों में निवेश के नियम कुछ अलग होते हैं.

एक आदमी एक ही एनपीएस खाता खोल सकता है. जब कोई एनपीएस अकाउंट खोलता है, तो उसे एक PRAN (Permanent Retirement Account Number) मिलता है. एक व्यक्ति के पास केवल एक ही PRAN हो सकता है. इसका मतलब दूसरा PRAN नहीं खोला जा सकता है. PRAN पूरी तरह पोर्टेबल है. यानी अगर एनपीएस अकाउंट शिफ्ट करना है, तो नया अकाउंट खोलने की ज़रूरत नहीं है. पुराने खाते को ही शिफ्ट किया जा सकता है.

किसी बैंक शाखा में जाकर एनपीएस खाता खोला जा सकता है. आधार की मदद से भी एनपीएस खाता खोला जा सकता है.

एनपीएस में दो तरह के अकाउंट होते हैं. एनपीएस टियर 1 और एनपीएस टियर 2. इनमें से केवल एनपीएस टियर 1 ही रिटायरमेंट पेंशन अकाउंट है. टियर 2 अकाउंट एक म्यूच्यूअल फण्ड की तरह है. खाताधारक जब चाहे पैसे निकाल सकता है.

गौरतलब है कि एनपीएस में रिटर्न की गारंटी नहीं है और न ही सरकार हर वर्ष रिटर्न की घोषणा करती है. निवेश करते समय यह बताया जा सकता है कि पैसा कैसे निवेश करना है. एनपीएस खाता खोलने का बाद चाहें तो यह निवेश का पैटर्न बदला भी जा सकता है.

यहां पर निवेश के कई विकल्प हैं -
इक्विटी फण्ड (E) में पैसा लगाया जा सकता है
सरकारी बोंड्स (G) में पैसा लगाया जा सकता है
कॉर्पोरेट बांड्स (C) में पैसा लगाया जा सकता है
इसमें फंज मेनेजर का चयन भी करना पड़ता है.

टिप्पणियां
यहां पर निवेश के दो तरीके हैं. निवेशक (E), (G) या (C) (ऊपर बताया गया है) में डाल सकता है. कॉर्पोरेट सेक्टर एनपीएस और आल सिटीजन्स मॉडल एनपीएस ग्राहकों के लिए इक्विटी फण्ड (E) में निवेश करने की सीमा अधिकतम 50% प्रतिशत है. सरकारी एनपीएस में यह सीमा 15% है.

अब एनपीएस में निवेश पर टैक्स लाभ मिलते हैं. कुछ खास स्थिति में एनपीएस से कुछ पैसा निकालने की अनुमति है. गंभीर बीमारियों की इलाज़ के लिए, बच्चों की उच्च शिक्षा या विवाह के लिए या घर खरीदने या बनाने के लिए अपने एनपीएस खाते से कुछ पैसे निकाले जा सकते हैं.

How investing in NPS can help you save tax

Capitalstars Investment Advisor

Although the National Pension System comes with exempt-exempt-exempt (EEE) tax status, there is a catch.

The National Pension System (NPS) is one of the financial products you can use to reduce your tax outgo. You can invest in NPS to save for your retirement as well.

Although the NPS comes with exempt-exempt-exempt (EEE) tax status, there is a catch. If you are planning on investing in NPS to save on tax, here are a few important points you should keep in mind.

The tax-saving benefit under NPS at the time of investing

At the time of investment, the tax-saving benefit of NPS can be claimed under three sections of the Income-tax Act, 1961. These sections are: - (i) Section 80CCD (1), (ii) 80CCD (2), and (iii) 80 CCD (1b).

Section 80CCD (1)

Tax-benefit under section 80CCD (1) is available on an individual's self-contributions to the NPS Tier-I account. Currently, an individual can claim tax benefit on a maximum self contribution of Rs 1.5 lakh in a financial year to the Tier-I account. The amount so deposited up to Rs 1.5 lakh can be claimed as deduction from gross total income before tax, thereby reducing the tax liability.

Therefore, if you have deposited more than Rs 1.5 lakh, say Rs 2 lakh, in your Tier-I NPS account, then you will be able to claim tax benefit on Rs 1.5 lakh only as per income tax laws. Remember, there is no limit on the maximum amount that can be deposited in the Tier-I NPS account.

This deduction comes under the overall limit of section 80C of the Income Tax Act. Current income tax laws allow a maximum deduction of Rs 1.5 lakh on an aggregate basis for the investment and expenditure incurred under sections 80C, 80CCC, and 80CCD (1). Therefore, if you claim deduction of Rs 1.5 lakh under section 80CCD (1), then you cannot claim a deduction of Rs 1.5 lakh under section 80C simultaneously.

Section 80CCD (2)

Tax benefit under 80CCD (2) can be claimed by the individual when the employer deposits the money on behalf of the individual in his/her NPS Tier-I account. According to current income tax laws, the employer can deposit a maximum of 10 percent of the individual's salary. Salary here means basic salary plus dearness allowance. Remember, there is no maximum restriction on how much can be deposited as long as it does not breach the 10 percent limit.

Section 80CCD (1b)

Apart from the above mentioned tax-saving benefits, an individual can claim deduction under 80CCD (1b) for a maximum of Rs 50,000 in a financial year. This additional deduction was introduced in the financial year 2015-16.

For Government employees

From FY 2019-20 onwards, government employees have an option to invest in NPS Tier -II account with a lower lock-in period. A government employee can invest a maximum of Rs 1.5 lakh in the Tier-II account of NPS to claim tax benefit under section 80C. Unlike the lock-in period till the age of retirement, the investment made in the Tier-II account of NPS under section 80C comes with a lock-in period of three years.

Lock-in period of NPS and partial withdrawals

NPS comes with a long lock-in period. The scheme matures once the individual turns 60 years. However, during the duration of the scheme account, partial withdrawal is allowed subject to certain terms and conditions.

For instance, partial withdrawal from NPS is allowed for the higher education of children, the marriage of children, purchase or construction of a residential house or flat, etc., if the Tier-I account has completed three years.

The maximum amount that an individual can withdraw from the Tier-I account is 25 percent of his/her own contribution. Also, according to current income tax laws, a maximum 25 percent withdrawal from subscriber's own contribution will be exempted from tax. Therefore, the maximum amount of partial withdrawal and tax-exempted amounts are equal.

At the time of maturity

As mentioned above, NPS will mature when the individual turns 60 years of age. To make the scheme attractive, in the July 2019 Budget, the government made some changes in the taxation of the scheme at the time of maturity.

Conclusion

Section 80C of the Income Tax Act offers a choice of various specified investment products in which one can invest and save tax. However, while making investments to save tax, one should link their tax-saving investments to their money goals.

NPS comes with a long lock-in period and certain conditions regarding partial withdrawal. In case an urgent monetary need arises, then you might not be able to withdraw from your NPS account except in the specified cases. However, on the other hand, if your goal is saving for retirement, then NPS is one option, apart from EPF that can be looked at.

Don't forget you will also grow old

Capitalstars Investment Advisor

Money management and budgeting assume the importance of gigantic proportion in times when pension benefits are all but over.

From changing smartphones frequently to actively shopping online on EMIs, 35-year-old Sudhir does not mind swiping his credit card for every little purchase. Employed with an IT major, he strongly advocates and embraces the "You Only Live Once" (YOLO) philosophy.

Sounds familiar? That is because he is not alone. There are many like him, especially millennials, who believe in instant gratification, even if it comes at the cost of addressing essential life goals. Technological advances coupled with the easy availability of credit has changed the dynamics of personal finance, and what was considered irresponsible yesterday is looked upon as a way of living today.

However, some things do not change, and one among them is the fact that "You Also Grow Old" (YAGO). There comes a point in everyone's life when with age not being on your side, taking a break from work becomes imperative, resulting in drying up of active income. It is then when your splurging habits in your yesteryears comes back to haunt you. This is the time when you wished you had been more prudent with money. Alas, that time is lost.

Why YAGO deserve attention?

According to the Economic Survey 2018-19, India's population is expected to rise under 0.5 percent during 2031-41. The reason for this rise will be an increase in life expectancy and a decline in fertility rate. The life expectancy in the country has risen by 11 years since 1990, a lot of which has to do with advancement in medical science.

All of this means a longer retired life, which calls for investing money in prudent financial instruments to build a retirement corpus large enough to see you through the golden years of your life. Simultaneously, it is essential to keep a hawk's eye on inflation, the biggest roadblock in wealth creation. Did you know that if your current monthly expenses are Rs 30,000, even modest inflation of 4 percent will push it to over Rs 97,000, 30 years down the line?

This is why money management and budgeting assume the importance of gigantic proportion in times when pension benefits are all but over. It would not be an understatement that what you splurge today is an opportunity lost to add to your wealth and build a sizeable retirement corpus by the time you hang up your boots.

Keep the specter of old-age poverty at bay

Attention to YAGO today will help you keep the specter of old-age poverty at bay tomorrow. At the same time, it will help you maintain financial freedom and be in charge of your life, without having to depend on children for support.

There is hardly a better feeling than to lead a life on your terms on retirement and pursue things you have missed out. For these to happen, it is crucial to building a large reservoir of funds for the sunset years of life.

How to curb, splurge and be retirement-ready?

A grip on investing basics coupled with curbing the need for instant gratification goes a long way in stemming discretionary expenses. At the same time, early investments in inflation-beating instruments such as equities can hold you in good stead.

For instance, a systematic investment plan (SIP) in equity mutual fund not only helps you to be disciplined with investment, but it also aids you in benefitting from the inflation-trouncing ability of equities as an asset class. At the same time, SIPs help you gain from the power of compounding in the long run that has a multiplier effect on wealth.

Monetary cap on credit and debit card usage can bring much-needed fiscal discipline and ensure you do not end up paying unnecessary EMIs, which can strain finances and impinge on essential life goals. Also, it is in your best interest to keep away from short-term borrowings for meeting lifestyle-related expenses.

Such borrowings, on a frequent basis, accompany a high rate of interest and paint you as a credit-hungry borrower. The twin disadvantages include a dent in credit score and procrastination of retirement planning.

The final word

While choices differ across individuals and there is nothing wrong in celebrating the present, waking up to the reality of growing old and saving up for it can ensure a secure dusk of life. Being an early bird in the journey can reap rich dividends in the future.

Retirement planning: 4-step plan to create an alternate support model in old age

Capitalstars Investment Advisor

The joint family is broken. But we can use our personal finances to create an alternate support model that is our own. Here is a list of resolutions I made, based on my interactions and observations at the assisted living facility.

What happens to us when we age? When I meet people living in assisted care, the range of behaviors leaves me somewhat worried. Some are generous and giving, but they are mostly a minority. Others seem angry and suspicious of the people around them. They appear worried and too focused on themselves. Such generalizations are dangerous, however, I do see these patterns and feel concerned.

Last week, I read a book for a 92-year old woman. She had a nagging body ache and was convinced she would die soon. She was determined to make it difficult for everyone else since she was suffering. The assisted living center where she was housed was tiring from her tantrums for everything.

When I finished reading to her, she broke down. The book was a moving family story. She told me how much she hates aging. How tough she found it, dealing with weakening limbs and aching bones, and how difficult it was for her to bear the pain. She recalled her youth when she played tennis and ran marathons. It was a combination of regret and resentment, but she told me she could not live with her body anymore.

Frailty is not an easy thing to deal with. Sometimes we substitute mental bravado to tell ourselves everything will be alright, said one gentleman of 90. But it lasts only until the next episode of illness, he rued. Denial is a good thing sometimes, he argued with me. You beckon the mind to support the weak body.

What happens when we all age, I fear. In another 30 years, will I become a cantankerous woman who dislikes herself and the world around her? Will my romanticized notion of a kind and generous grandmom wilt under the pressures of physical infirmities? Here is a list of resolutions I made, based on my interactions and observations at the assisted living facility.

First, I will find an alternate support system that sustains and nurtures me. The joint family of yore was a good set up that had in-built buffers and support for the young, the aged, the desolate and the invalid. We have long given that up for practical reasons. Today, we live with the determination that we will not burden our children.

But the need for community seldom goes away. We are a generation that leaned on friends, and that is how it shall be as we age. Just as the sisterhood saw us through our tough years as mothers and aging women, there will be a bond as friends age together. It will ensure we are there for one another.

There will be a house that keeps us together, and there will be food, conversations, laughter and music. There will be care for those who lose their spouse, and there will be a garden full of flowers, fruits, and birds to stroll into. I am determined to create this with my close circle of family and friends. We shall pool our resources to make this happen and bring to the table our skills as managers to create a sustainable solution that is fair, equitable and well-funded.

Second, we will ensure that our lives include the young. In my assessment, one of the reasons for assisted living facilities to be gloomy and pale is the lack of laughter. Little children and young people bring cheer, positivity, and optimism to the atmosphere. In some Scandinavian countries, college students are offered accommodation at old age homes in exchange for volunteering. We like that model.

If we can integrate the young, through a set of activities that interest them, it might be mutually beneficial. We could tell stories; teach math and languages; watch films and discuss the nuances; hear music and teach them to appreciate it, and pass on the lessons of our life without becoming too overbearing. Imagine doing this in a remote village that does not have access to such facilities. How transformative it would be for the children growing there, to receive such education from elders.

Third, we will strive to simplify and minimize. We will pursue the path of consuming less, hoarding even less and living with just the essentials. The burden of things becomes too much as we age. It is sensible to stop spending money and time on stuff and focus instead on life. That reduces our expenses, makes it easy to move when needed and reduces the stress about what happens to stuff after we are gone.

Fourth, we will find a way to finance all of this, even as we plan to retire. There is the cost of establishment, cost of living, activities, and interests, the corpus needed for healthcare and medical treatments and the details of bequest and giving away. This is a serious financial enterprise, where money must be found for the expected and the unexpected.

We are considering a consolidation of all assets into primarily financial assets that will have higher flexibility. Properties will be disposed of and the proceeds invested. We will make plans for the house and how the finances of that enterprise will be shared and managed by the group. We will draw upon the wisdom of age to establish common rules so that we can live together harmoniously.

Many accuse me of still being romantic about aging. But my perception is that the bitterness comes from the loneliness. We cannot solve it traditionally anymore because we want to be in charge and don’t want to guilt-trip the children either. Retirement planning in our head, therefore, has two components – the first 15 years of energy and strength to travel, do more, and learn. The next 15-20 years of settling down with a community of our choice, in a bond of love, attention, company and caring. In a model that includes the young, the garden, the animals and the birds. With food and music flowing every day. Our personal finances will be aligned to serve these goals.

The joint family is broken. But we can use our personal finances to create an alternate support model that is our own. We can try to preserve the joy of purposeful living.

How to ensure the financial safety of your ageing parents

Capitalstars Investment Advisor

A senior citizen’s need to keep cash at home stems from the fear that they may not have sufficient funds in case of an emergency.

Rajpoot works in a metro. He is worried about his elderly parents who live on their own in his hometown. While he respects their wish to be independent, he cannot help but fret about the threat of robbers targetting senior citizens living alone. Like all senior citizens, his parents too are vulnerable to such attacks. He is aware that they keep large amounts of cash and jewelry at home for emergencies. Rajpoot wonders what steps he should take to make the lives of his parents more secure.

A senior citizen’s need to keep cash at home stems from the fear that they may not have sufficient funds in case of an emergency. At their age, Rajpoot’s parents’ biggest fear would be a medical emergency. He should consider enrolling his parents in a cashless health insurance plan which would cover at least their emergency medical expenses. He should add them to his health policy if procuring an independent policy proves difficult. He will need to explain the process of using the facilities under the policy so that his parents become confident in managing their needs without holding a large amount of cash. There are some tax benefits also available for senior citizen parents’ medical insurance under Section 80G.

A credit or debit card or a mobile wallet is another convenience that can eliminate the need for cash. Digital payments are widely accepted, including in medical and grocery shops. Rajpoot should encourage his parents to use the same and provide assistance in whatever way possible. The payment of credit card bills could be handled by him through Internet banking. Jewelry, except what is needed for regular wear, must be stored away in a bank locker.

By taking all these measures, Rajpoot’s parents’ dependence on cash will be minimized, while ensuring liquidity. This will allow them to lead an independent life without having to worry about safety.

Retirement Planning: Rs 3.6 crore can give you Rs 93,000/month. Is this enough?

Capitalstars Investment Advisor

Some of the common aims for which Indians save money include funding their children’s education, establishing or funding their own business, investing in property and supporting parents or relatives financially.

A report by Standard Chartered shows that most of the Indians with enough disposable income to save and invest have a huge opportunity to realize their aspirations for retirement. And, around 32 percent of them are already on track to achieving more than half of their wealth goal at the age of 60. For the remaining 68 percent, who are further away, it is still possible to narrow the gap with well-defined goals and a considered wealth management approach.

The Standard Chartered Wealth Expectancy Report 2019 says that the average wealth expectancy of those in India with enough disposable income to save and invest is Rs 3.6 crore (USD518,000), or Rs 1.3 crore for the emerging affluent, Rs 2.6 crore for the affluent and Rs 6.9 crore for HNWIs.

These savings will give them Rs 93,000 per month to live on during retirement. This would be much less than both their current income and their wealth aspiration. If these individuals spend their retirement fund (mentioned above) at the average monthly rate to which they aspire, their wealth expectancy would last six years for emerging affluent, 9 years for the affluent and just 5 years for this.

The report has examined the saving and investment habits of 10,000 emerging affluent, affluent and high-net-worth individuals (HNWIs) across 10 fast-growing economies.

The study shows that there is a strong appetite among Indian savers to learn more from reputable sources and experts when it comes to making their money go further.

The report said, “Indian wealth creators plan ahead: three in five (60 percent) have a financial strategy that includes investment products. Despite this, half (49 percent) of India’s wealth creators still feel very far away from their top financial goal.”

“77 percent of Indian wealth creators believe money is essential to happiness, more than in any other market in our study. In fact, wealth is considered so important that many Indian wealth creators are anxious about their financial future: 64 percent of the affluent group say they worry so much about money that it affects their health, and 62 percent of the emerging affluent feel so overwhelmed by financial planning they fail to put a plan in place at all. The emerging affluent are also the least likely group in India to seek professional investment advice,” the report added.

Can you maximize savings?

Steve Brice, Chief Investment Strategist for Standard Chartered Private Bank, says: “Research shows most retirees fall short of their income and wealth goals. The ‘wealth expectancy gap’ arises in part from our failure to assiduously plan for our financial future.”

Hence, he suggests that the sooner you start saving, the faster you will reach your aspirations. “Securing your financial future starts with a well-thought-out plan, mapped to your life goals. The next important step is to save and invest early. Finally, by diversifying your wealth across various investment solutions, you have the potential to generate better risk-adjusted returns, putting you on the path to a worry-free retirement,” says Brice.

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Investing in good health at young age can help secure retirement. Here's how

Capitalstars Investment Advisor 

Focussing on health from a young age can reduce your financial burden in the retirement

Health is wealth is an adage extolled as often as it is ignored. While awareness around fitness has increased over the past few years, Indians continue to fare poorly on several parameters.

According to a study conducted by fitness device platform Goqii, Indians under the age of 45 saw a rise in the incidence of lifestyle diseases in 2018 compared to 2017. Incidence of diabetes rose to 5.1% from 3.6%, high blood pressure to 9.4% from 4.9%, high cholesterol to 12.1% from 5.4% and thyroid to 6.1% from 4.4%. A Cigna 360 wellbeing survey this year found that close to 82% of Indians suffer from stress, with work, health, and finance-related issues being the major causes.

Health is wealth

What if maintaining good health directly translated into monetary rewards? Would that induce more Indians to work on their fitness levels? Some health insurers think so. Insurers like ManipalCigna, Max Bupa and Aditya Birla Health offer products that monitor and incentivize fitness activities. “These benefits range from simple health check-ups that help you take precautionary measures to rewards and discounts that enhance coverage or reduce premiums,”.

According to experts, constant monitoring and proactive action can postpone the onset of lifestyle diseases. “Today, many individuals are diagnosed with diabetes at the age of 25-30. It can be easily delayed by 10-20 years and in many cases prevented altogether with the help of diet and physical activities,” says Abhishek Shah, Co-founder, and CEO, Wellthy Therapeutics. Take the case of 63-year-old retired banker Mahesh Nailwal. He has been practicing yoga for the past two decades. Regular expenses can spiral out of control if you have diabetes or other ailments. I barely need to spend money on medication thanks to my daily practice,” he explains.

Besides the cost of hospitalization, diabetes can also reduce your productivity. “It can lead to disabilities, heart issues, and eye-related concerns, dragging down your earning capacity,” adds Shah. Therefore, it is best to keep lifestyle diseases like diabetes and hypertension at bay by adhering to a healthy regime from a young age, instead of taking action at a later stage.

The earlier you start, the higher your chances of being in a healthier state over the long-term. “It is never too late to start, but as your body clock keeps ticking, you will have to invest more effort to extract the same amount of benefit,” says Shah. Much like investing in equities, it pays to start early, be systematic, dig in your heels and stay put over the long-term instead of looking to invest a lump sum closer to retirement.

Health insurance plus

A large health insurance policy is no substitute for good health. Even if you have purchased health insurance at a young age, the premium could spiral out of control by the time you need it during retirement. “At the age of 60 or 70, health premiums can shoot beyond affordable limits. Renewal premium for a Rs 5 lakh cover can rise to Rs 70,000. Many tend to terminate their policies at this stage,” says Pankaj Mathpal, Founder, Optima Money Managers.

As a result, they are left without a cover at a vulnerable stage of their lives. “It is important to build a separate health kitty for retirement during your working years,” he adds. Also, remember to replenish this corpus regularly. Unlike the health insurance sum insured which is available for use every year, once your kitty is exhausted, rebuilding it from scratch will not be easy.

This is exactly what retired government employee Bhuwanchandra Joshi, 76, has done. Out of his pension of Rs 50,000 per month, he sets aside Rs 10,000 in a liquid mutual fund every month to meet contingency needs. “This is needed irrespective of whether you have health insurance or not,” he says. It can foot bills for expenses not payable under your health policy and partly replace your unviable health policy if the need arises.

Beyond physical health

While planning for retirement, you not only need to identify recurring as well as one-time large expenses like hospitalization but also activities that can keep you fruitfully occupied. This need is often ignored as finances take center stage in a typical retirement planning strategy. Octogenarian J.P. Dhondiyal, a retired railway official, extended his career by 12 years after retirement by taking up assignments with leading corporates.

Not content with having his hands full, he worked on his mission to set up a school for underprivileged children in his hometown. “I always wanted to give back to society and work towards making such kids’ lives better,” he explains. The resolve has kept him going and he continues to oversee the affairs of the school.

Both Nailwal and Joshi, too, keep themselves busy by engaging themselves in social and community service activities. Hobnobbing with others and contributing towards charitable causes can boost your overall well-being quotient, potentially reducing health ailments and thus, medical expenses.