Meet Mr. Alok Shukla
Mr. Alok Shukla, age 60, retired after 35 years of service with a bank. He had started as a clerk, worked his way up and retired as a General Manager. He was proud and pleased with the way his career had progressed.
His wife, Anjali, had always stood by him supplementing the family’s income. She taught at the local school and had the love and respect of her students and their parents.
The couple had two children both boys of age 28 years and 30 years. Mr & Mrs Shukla had managed to educate them well and both had decent well-paying jobs. The boys were married and were settled separately. They younger one had just got married and moved out a few months back.
Mr. Shukla had secured a loan from his bank and had bought a three bedroom house, which was fully paid for. The house had appreciated in value considerably over the years, which warmed his heart. Two weeks into his farewell party he took stock of his situation.
Mr. Alok Shukla’s Financial Position at Retirement
Mr. Shukla knew he was eligible for pension but it wasn’t his full salary naturally. He had given this a thought earlier and had been frugal all his life and had saved well for his retirement. He knew he had no other means to increase his income post retirement so postponed the unpleasant thought of income post retirement with the idea that he shall cross the bridge when he comes to it.
Most of his savings were in fixed deposits of his bank. He had some insurance policies, which were due to mature soon and had some money in government run savings schemes that provided tax relief.
His wife had decided to resign from her job a couple of years back and now taught children at home. She looked after her own expenses and even bought him a gift or two.
He did some quick back of the envelope calculation and realized that he was not in dire straits but the income from his investments would just be enough to meet his minimum expenses. Inflation had surreptitiously increased his living expenses, which were so ably managed by his wife all these years.
His needs weren’t many but he did have a wish to enjoy his life a little, drive a nice car, travel a bit and be active in his community. His wife had always expressed a desire to visit a few temples, go for a Himalayan Pilgrimage tour and visit her brother in Singapore. Mr. Shukla’s dilemma was now how to fulfill these needs?
Mr. Alok Shukla’s Retirement Investments
Mr. Shukla had not ventured into the perceived high risk opportunities his colleagues always talked about. They were forever talking about stocks, IPOs and commodities and some had also bought land and got into unregulated investments that promised higher returns. He had always steered clear of all these options. He had worked hard and could not tolerate the idea of losing his principal.
He had seen his cousin lose all his money speculating in stocks and had decided that was not to be his fate. He was not a “greedy” person wanting to gamble and make a fast buck. His life had been arduous and he did not think any “shortcuts” worked.
He had had a simple mantra in life… Work hard, live within your means and save as much as you can and life would take care of itself.
Mr. Alok Shukla’s Post Retirement Reality Check
Reality hit Mr. Shukla hard. His children were earning well but he had too much self respect to ask them to fund his indulgences and holidays. He also knew both would need to buy a home. As a bank manager he was aware that the EMIs would eat into a large chunk of their pay. They would certainly contribute should the need arise but it wasn’t fair to ask for assistance at this stage.
He could sell his house and go live in a smaller home in a distant suburb. But he did not have the courage to bring this suggestion to his wife. The house held dear memories for them and also would mean being far from their children. This idea was summarily rejected.
He felt a bit dejected and let down. His way of looking at things was that he had done everything right in his life, lived by every rule in the book and now what? He would still have to scrimp and save?
He crunched numbers every day, was a General Manager of a bank for Gods sake, he should have known better!
The fact was, there was always an unavoidable expense waiting for his attention. His children never demanded expensive stuff but the higher education and weddings of his children had whittled down his savings.
Mr. Alok Shukla’s Remedy for Retirement Investments
Mr. Shukla gave his post retirement financial position a long thought and the took advice of a colleague who had retired a few years back. His friend seemed to have none of his troubles. He was lucky that his friend shared his full portfolio and strategy with him. So after some long discussions over tea and snacks he came up with a solution.
He would seek out some part time /consulting assignments. He had considerable experience and goodwill and could explore the option. He would also let out the extra bedroom to a paying guest. This would mean altering his lifestyle a little but could also be positive in terms of some companionship for them.
He was aghast to notice that although his friend’s initial savings were lower than his, his kitty post retirement was much higher. The return his friend had earned from stocks and equity mutual funds was much higher than his safe fixed deposits.
He could not undo the past but decided to proactively manage his portfolio.
Mr. Alok Shukla is Now Smiling
Mr. Shukla decided to invest the LIC maturity proceeds in some equity mutual funds. Also if and when he had a surplus after he augmented his income from the part time assignments and paying guests rent he would invest in growth assets.
Slowly as his FD’s/Nsc s and bonds matured he assessed his portfolio, subscribed to online knowledge sites that showed him the right path to Retirement Investments and gave him Knowledge and Training, asked questions and seeked out answers. His meticulous nature took him 5 years to get his portfolio rejigged but the mission got accomplished.
His advise to his children now is to begin saving for their retirement now and save smart rather than save more.
He is living a comfortable life, takes up a few assignments and the paying guests are now a part of their lives. There isn’t a single desire of his life left unfulfilled!! .
The memory of the smile, which lit up his wife face when they boarded a flight to Singapore, leaves him a contented and satisfied man.