10 Ways to Make the Most of Your Retirement Corpus: A Lowdown

Jun 07, 2018 | 10 months ago | Read Time: 3 minutes | By iKnowledge Team

It is crucial you manage your funds carefully to ensure they aren’t depleted quickly. If you have planned your retirement in advance, you may have diligently put aside savings towards it every month. After saving up for a long time, you now have a sizeable corpus that can keep you comfortable during retirement. Here are 10 ways to help you get the most from your retirement funds:

1. Calculate how much you need monthly

Write down all expenses you incur on a regular basis. This may include groceries, utility expenses, transportation etc. Once you have comfortably covered these expenses, the surplus can be invested to generate more income. For e.g., look at renting your house or investing the money.

2. Check how you can use your assets

Make a note of everything that you own, and how each of them can be utilized. Be practical about it, and use it to your benefit. For instance, in case you have two houses, four cars, a plot/land, and your retirement plan is to travel the world, then owning these assets may not be of much help. So, you could sell them off and use the money to go on a world tour instead.

3. Segregate your assets into three sections

Allocate them broadly into those

  1. You need for daily use
  2. You need for future use, and lastly
  3. You may give away to charity or heirs

So, you could allocate about 30% of them for current use, 30% for future growth, 30% to give away and the remaining 10% for emergencies.

4. Invest the remaining resources

Ensure you are protected against inflation by putting your resources to good use. Use your resources for wealth creation and value addition. For instance, you can invest in wealth creation instruments like ULIPs, equity, debt that can be drawn when needed, while allowing the remaining to grow. You can use the rest for making travel plans, paying off loans or buying a car.

5. Give away property marked for heirs wisely

For instance, your successors can be given property that they can decide to sell or reinvest. You can pass on your equity shares to your inheritors who can continue to grow these investments.

6. Don’t draw a huge chunk too early

Make sure you draw money in low quantities in the early years of your retirement. If you draw huge chunks too soon, you will be unable to grow your money for protection in the future. So, the thumb rule for drawing retirement money is low single digits. The ideal amount to withdraw retirement funds is 3-4 % annually.

7. Grow your investments simultaneously

Due to inflation, you may need more money in the later years to maintain your standard of living. Grow your equities or bonds simultaneously to cash in on them later. Transfer the money from the growth segment to the income segment to live comfortably. You may need 5-7 or 7-10 years and have a good time frame for the investments to grow in value.  This is because you need to invest long-term as the potential gain is higher and risks are lower.

8. Continue to maintain your portfolio

Make sure you weed out valuables or investments that are not offering any growth and buy ones that show promise. For example, if you have a house and put it on lease but you are getting too little rent, it is wise to sell it off. Or, if you have invested in ULIPs, you can switch your funds from non-performing to performing ones. If you have equity funds that are doing poorly consistently, you can dispose of them as well.

9. Invest in your health

Include healthcare expenses in your budget, and focus on a maintaining a healthy lifestyle. Make good health choices, for instance, if you are a smoker, try to kick the habit. Go to the gym, sign up for yoga classes, eat healthy etc. Review your health insurance from time to time. Include your health and healthcare expenses in your annual budget.

10. Accept help from children

If your children decide to chip in for your expenses, allow them to do so. This will help them feel included. You will also be able to afford any large healthcare expenses. Do not refrain from accepting monetary help from your children. 

Conclusion:

Make your retirement corpus work for you and not the other way around. You can have a secure and comfortable retirement if you manage your money wisely.

Advt. no.: IA/May 2018/3990

If you are worried about the well-being of your loved ones, a health insurance plan and a life insurance policy such as Aegon Life iTerm or iMax plan will provide you with the much needed peace of mind.


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