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We have different stages in our life. Our roles, responsibilities and priorities change with the stages of life. Our financial planning and investment decisions should perfectly coincide with our financial needs. But financial planning for retirement is the most important and therefore, should be considered well in advance. Because it is rightly said that after retirement, second inning of one’s life begins.

Savings and its proper investments should be started at an early age. Proper financial planning in advance can help you to satisfy your financial needs. Nowadays, people are aware about the importance of savings and investments. Moreover, there are so many investment alternatives available. Therefore, it is advisable to start savings and investments at an early age, when you start earning, and we all should do that.

Even after retirement, you may receive a good amount of PF, etc. retirement benefits or you may receive a good amount on sale of land, house, office or after retirement, you make regular savings from your pension income. All such situations demand a proper decision about their investments in such a way that they are beneficial for future.

There are many options available for investments which include equity, debt, mutual funds, Fixed deposits, various savings schemes offered by banks and post office, Public Provident Fund (PPF), different types of pension schemes, gold and many more. Each option carries different return and risk as well as different time spans. Therefore, one has to be very clear about the purpose or goal for which investments or reinvestments are made.

When you take any investment decision after competing half century of your life, your objectives and goals change from the previous ones. It is very obvious, that after retirement, your earning pattern changes, your priorities change and your financial needs also change.


This factor is the most important when you invest your money after your retirement. At an early stage of life, you may be ready to take high risks for earning high returns. But after retirement, when you are in sixties, too much risk is not advisable. At this stage of your life, security of your hard-earned money should be your first priority as these savings and investments are the only support of your retired life. Therefore, you should choose such investment options which are less risky and your money are secured for future.


Liquidity is the second important factor. Your money should be available when you really need them. If you are not able to encash your investment for your emergency situations like medical treatment, etc., there is no meaning of it. Therefore, some portion of your investment should be in such forms which can be liquidated within a short time.


This is the third important factor. Investments make some sense when they earn you good returns. If you are a salaried person, after retirement, you don’t earn regular salary income and you depend on either pension income or regular returns coming from your investments of funds. If you are a businessman or a professional, then also after a certain point of age, you start working part time or prefer a retired life. In that case also, your regular income stops or decreases. To maintain a balance, you should invest your savings and retirement benefits in such a way, that some fixed and good amount of regular income continues to flow.


(1) Make sure that you have diversified investment portfolio. You should divide your total investment amount in different portions and invest them in diversified sectors i.e., equity, debt, real estate or gold as per your capacity. Such type of diversification will help you to minimize risks.

(2) Never put all your eggs in one basket.

(3) Avoid investing majority amount in one type of sector. Suppose, your majority amount has been invested in real estate. Now you need money urgently for medical treatment, then your investment in real estate will not help you. Because sale of property takes time and it is expensive also. So here your investment portfolio fails to satisfy ‘Liquidity’ parameter.

(4) Major portion of your savings and investments must be under your control only. Whatever may be the case, never give ownership or control of your entire savings, investments or properties to your children. Help them when they are really in need, make them feel secure, but never let them control your money and investments. This is important for self-dignity and financial independence of you and your spouse at an old age.

(5) Avoid investments having too long lock-in periods. It is not advisable for senior citizens to block their higher proportion of investments in such products having too long lock-in periods. For example, if you go for fixed deposits, then there should be different fixed deposits ranging from maturity period of two to eight years. By doing this, you will receive a specific amount at specified intervals to fulfill your financial requirements.

(6) Spend…spend…and spend for YOURSELF….

Sometimes, we find around us the people who save, invest, reinvest and keep on saving and investing and reinvesting, but they hardly spend! Just think…You spent your entire life in earning for your family, you educated your children and made them capable and independent. Now, at this point of time, you should spend your money for yourself. Don’t stress so much on savings, that you cannot spend for yourself. If your children are capable and if they are earning, now it is their responsibility to save money and invest for the next generation and their future. Fulfill your dreams, cultivate your hobbies and try to do everything that you couldn’t do till now. It is your retired life, it is your money. It is very right time to spend it for yourself.

Retired life is your second inning and you should live it 100%. But, you can have a stress- free retired life only when you have made proper financial planning and proper investments of your savings.

The author is a Chartered Accountant and a member of ICAI


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