5 tips to secure your retirement corpus 

Most people fail to save adequately for retirement since the goal seems to be in the distant future.

However, if you want to build a sizeable retirement corpus, you must start early and review your

portfolio regularly.

1. Fix Corpus, choose investment avenue 

As with any goal, the first step is to calculate the amount you want in the given time. This will depend on your current lifestyle and the number of years for which you want an income after retirement. Since building a retirement corpus is a long-term goal, your investments will vary accordingly, and the earlier you start, the better it is. So, at 35 years, if your monthly expense is Rs, 50,000 and you want to maintain this level for 15 years after retirement, you will have to invest Rs. 29,112 a month ( at an annualised return of 10% and inflation rate of 6%). However, a 45 year-old will have to invest Rs. 93,196, while a 25-year-old will have to invest only Rs. 10,174 a month. If you start saving early, ensure that at least 75% of the monthly investment is in equity. For the debt portion, you can depend on your monthly contribution to EPF and investment in the PPF. If three-fourths of a portfolio in equity is too risky for you, invest about 30% of your surplus in debt mutual funds. Review the portfolio regularly to ensure your investments is on track.

2. Repay debt before you retire

When you retire, chances are that you will have no regular income. In such a scenario, it is important that you are not stuck with any loan repayments as these will deplete your savings fast. So, if you’ve taken a home loan, make sure that you repay the entire amount before you hang up your boots, even if it means paying a higher EMI to reduce the tenure. In the case of insurance, there will be few policies that will be mandatory even after retirement, such as car insurance, but for other insurance like a health plan, ensure that you buy these early, because the older you are, the higher the premium that you will be required to pay.

3. Tweak your portfolio

Investing in equity is important for creating a retirement corpus as it gives good returns. However, as you shift closer to sunset years, reduce the equity portion and increase debt in your portfolio. This is essential because preservation of your corpus becomes more important than its appreciation. So, if you start investing at 35 years, 75% of your portfolio could be in equity, but at least five years before you retire, equity should not comprise over 40% of the portfolio. You can either use systematic withdrawal plans to shift the money from equity to debt instruments, or move a sizeable part of corpus of bank deposits. However, just because you are retiring does not mean that you have to give up on equity entirely; invest 15-20% of your portfolio in equity funds.

4. Build a contingency fund

A medical emergency can cripple the best of finances, and for retirees, it could be disastrous. Besides, there are very few health insurance options for retirees, and the ones that are available, are expensive or offer small covers. In fact, most health insurance plans end at the time of retirement. It is worse for people who depend on the health plans provided by their employers during their working lives. It’s best to buy a health plan early, but apart from this, you must also keep a contingency fund, usually 5% of the total corpus built, for medical emergencies. This should be put in a liquid fund so that it is available readily.

5. Bank on reverse mortgage

The best laid plans can go awry. Whether it’s a child’s higher education or a medical exigency, you may suddenly find yourself short of the planned retirement corpus. If you find yourself in such a situation, and own a house, the safest way to get a regular stream of income is to reverse mortgage it. Under this scheme, home owners above 60 years of age can convert a part of their self-owned home into income without having to sell it. The bank calculates the value of the house and fixes a percentage of its current value as loan amount. This is based on parameters, such as the likely lifespan of the senior citizen and his spouse. Typically, the loan amount is 60-70% of the market value of the property, which will earn you a good income. After you and your spouse die, the house is sold by the bank to recover the loan amount, and the balance is given to your heirs. Alternatively, your heirs could buy the house from the bank.

   

Source by ET

Best Regards,

Hirannya Financial Planners

Retirement Planning is most important part of your life. Retirement Planning

Nothing is permanent in this world. Everything that comes will definitely go including us. But we don’t know when. Apart from this everybody would like to live life peacefully as long as they live. You have to decide whether you want to depend on somebody or live on your own without compromising your life style throughout your life. That is why it is best to put our best efforts and save more for the future. The important thing you have to begin with is to have a retirement plan for you today. Retirement Plan is very important in our life. The earlier we construct the structures to attain a wonderful retirement the better for us. Saving for your retirement is one of the toughest and most vital things you will do in your working years. Because you have to save for your children's college education, paying your home loan, children’s marriage, buying cars and all the other everyday costs.  Everyone has their own retirement dreams as well. The thumb rule is that you will need approximately 70% to 80% of your pre-retirement   income   to maintain your lifestyles in retirement. However, depending on your own situation and the type of retirement you hope to have, that number may be higher or lower.

There are lot of factors one should consider for retirement savings.

Retirement Age: This is the first factor you should consider at what age you expect to retire? In reality people say that they will work even after retirement from current job. Here you have to consider like health problem, job instability, or change of workplace etc. Assume that your retirement age is 60 then earlier you retire you need more money throughout your retirement life. It is best to prepare for unanticipated events that may force you for an early retirement. Life Expectancy: Nobody knows the life expectancy. There are few factors which may give     you a hint. Your family history – like your parents and your relative's current age or how long they lived. Common diseases in your family.  Your past and present health status etc. These are all the factors you have to consider when calculating your life expectancy. You will approx find the number of post retirement years you will spend. Inflation: Inflation is one of the main factors while you save for your retirement. Just to save for retirement you start saving but forgot the impact of inflation then your savings will not sufficient. If you don't account inflation while saving then inflation will reduce your value of your savings. So it is very important that your saving has to exceed inflation. Your Lifestyle: Different lifestyles are being adopted by different people. Generally Lifestyles are usually simple for most the people. But it is very important that what type of retirement lifestyle you would like to enjoy. Like travel, or hobbies you would like to pursue etc. These are all questions can help you to decide your required corpus for your retirement. Many people tell that they would like to work part time after retirement. But the answer is practically not possible. Health: Nowadays it is very important to consider the cost of health care. Health care costs are rising every year than inflation. People get health insurance cover from employers generally till retirement. Very few offers this after retirement. If you are not taking this in to account then it will eat your savings later. It is better advisable to buy long term health insurance for your better tomorrow.

How much you need at the time of Retirement.

POWER OF COMPOUNDING: If you start investing early for your retirement you can gain the benefit of POWER OF COMPOUNDING!

Let us explain how. Assume if you need to create retirement corpus of Rs/1.5 crs at the age of 60. Today you are 30 yrs old. You have 30 yrs left for your retirement. If you start investing Rs. 2,140 /per month for the next 30 years then assume at the rate of 15 per cent you will have a corpus of Rs. 1.5 crs. Take the other example suppose if you don't start now and at the age of 45  you decide to start investing then to have a corpus of Rs 1.5 crs you will require an investment of Rs 22,160 per month!  Now see the power of compounding! The benefit of starting at early age is you have the TIME with you and you can save with small amount and still you can achieve the retirement corpus. How to calculate your retirement corpus:

The following factors are taken in to account when calculating your required retirement corpus .

Your Life expectancy and years left after your retirement. Expected return on retirement corpus. Inflation rate. Your expected monthly/yearly expenses. Then after calculating your required retirement corpus we have to find how much money you have to save to get that required retirement corpus.  The following factors are taken in to account.

How many years left for retirement?

Expected rate of return during this period Available current investment corpus.

After considering all these points you should have a better understanding of how much corpus required at the time of retirement.

Don’t spend your retirement years by depending on somebody. Plan now and start investing to reach your retirement dreams.

Thanks & Regards,

NITIN L. GHADGE

 “Indians are great savers but bad investors”

Money represents different things to different people. For some, it could mean financial independence. For others; it could be security or the means to enjoy a desired standard of living. All of us work hard to ensure that we have enough money at the end of the day. And we invest this money in a variety of investments so that it can make even more money. In a way, saving is a postponement of happiness – the investor commits to consume less today in the hope that he will be able to consume more in future. But do we save and invest in the right manner? Is there a plan of action that guides our investments? Many investors randomly put money into various instruments without considering what they are putting away the money for. Some will spend more time planning a vacation than deciding how to invest their life savings. Most people buy assets as and when they become hot property. But this approach to investing is self-defeating. The investor is likely to realise some years later that his portfolio has not taken him anywhere. Not surprisingly, financial planners often get desperate pleas for help from first time clients whose investment portfolio is usually a complex web of financial products hoarded without any thought. “Indians are great savers but bad investors”. We don’t understand the importance of attaching investments to our goals.

Investing requires a methodical and disciplined approach. You need an investing roadmap so that you reach your financial goals. This requires you to look at the big picture. Ask yourself, why are you investing in the first place? Only after you determine your goals, and the time horizon for achieving each one of them, should you choose the appropriate investment to reach these goals.  ”When investments are linked to your goals, it makes you a focused investor. One is mentally prepared to deal with volatility so that abrupt decisions based on prevailing market conditions can be controlled.”

Thanks & Regards,

Nitin L. Ghadge.

Dear Investor,

Technology is the cutting edge which defines our lives today.

Increasing use of technology is visible in all spheres of our life.

Be it Google, face book, twitter or mobile. The use and application of technology is ruling our lives today and it will be dominant in times to come.

In order to move with the changing times as well as to offer you better and seamless services at all point of time, HIRANNYA FINANCIAL PLANNERS has always adopted new technologies to create new product offerings and making investments a better experience.

As first initiative, we launched our website in 2012. Currently you can view your portfolio on line at any time of the day 24 X 7. Besides it offers information about MF industry, various products and dividends announced in various schemes.  And I am happy to share that more than 500 investors are availing this service.

We are continuously working towards improving our services be it online or offline. We have invested large amount of money and time in technology to create innovative ways to do new business, and offer the products and services that don't exist today.

In the first phase, you will be able to buy, sell and switch mutual funds online. It will eliminate hassles and errors related to paper work, making transactions smooth and painless. Gradually it will cover all Financial Products. It will also add various investor friendly features in future making it a great experience for you all.

India is the nation of billion people, opportunities and aspiration. We at HIRANNYA FINANCIAL PLANNERS symbolize the Indian opportunities to create wealth for our investors.

We are extremely excited about this project and believe it will break the geographical barriers, and offer basket of products to all our investors, spread across various states, countries.

To know more and start investing online, please contact your advisor at HIRANNYA FINANCIAL PLANNERS or contact  our offices.

Happy Returns !

- Nitin Ghadge.

Do write in your feedbacks at : www.hirannyafinplan.com

Estate Planning

Estate Planning or as we like to call it “After Life Planning” has two basic characteristics vie; Most Critical Area Most Ignored Area No one even likes to think about this area; it’s unpleasant and who wants to even imagine the end of life!

Besides many feel that this is just for the rich, super wealthy type of people. Basically if you earn something and you have created some asset estate planning is meant for you. Your estate is all the wealth that you possess; car, house, jewellery, bank accounts, Mutual Fund’s, shares, antiques, collectibles …everything you own. You want to make sure that it is handled well after you and that it goes into the right hands; it is distributed to your loved ones or to whomsoever you decide.

Do it yourself:

If the above holds true for you then the process is very simple. You can start right now; pick up a paper and pen and simply write down what you would like to give whom. This is your Will. There is nothing right or wrong about it; it does not need to have iron clad legal language etc. A simple wish list of who should get what signed by two witnesses should do for starters.

Let us guide you:

There are 3 fundamental things we like to do when we undertake Estate Planning assignment for any family.

1. Detailed interaction:

We note down things you want as well as make you aware of many things that might not be directly obvious. We make your draft Will followed by many rounds if needed to finalise the Will document.

2. Start the Estate Consolidation & Transfer process right away:

3. Bypass legal issues:

In doing the above we essentially like to do this where we bypass any legal bottlenecks. If you die with a Will your family will most likely need a probate to execute the Will. If you die without a Will your family will need a succession certificate.

Then it is important to understand the popular options you have for distribution of your wealth / assets;

Nomination Gifting Joint Holdings Writing a Will Family Agreements Memorandum of Understanding Memorandum of Settlement Creating a trust Creating a family company

Welcome to Hirannya Financial Planners

Happiness is not in earning more money or having more wealth. Happiness is in achieving your life's dreams, fulfilling the promises you have made and having peace of mind. That's the driving principle for us. We help High Net worth Senior Corporate Executives, Doctors, Business Owners, Celebrities, Professionals and NRI families. Protect their wealth Grow it in a meaningful and reasonable manner Distribute their wealth to their next generation (Succession Planning) Avoid costly mistakes Capitalize on the opportunities in the market place and last but not the least implement     things on time We are committed to assisting you in achieving your unique financial goals, while freeing your time, and your life, of the day-to-day worries of managing money and making sure that you have the best written financial strategy implemented.