PLANNING FOR RETIREMENT IS CRUCIAL

 

We professionals, who are self employed in some way or the other, are so busy planning the next strategy to succeed, that we often do not even think of retiring. This is not work, this is our purpose of living, we say, and we keep on toiling passionately. I have to admit that this passion is the best anti-aging medicine ever invented and so to us retirement is an alien word.

But not all senior people are working because they love to do so. They are concerned about the cost of living, which is going up exponentially, and the social security, which is conspicuous by its total absence. An honest taxpayer, who has contributed to the government coffers all his/her life, is not assured of any healthcare benefits and societal support when he/she needs them most in their senior years. Retirement, for them, is a serious decision, which they keep on postponing as long as they can.

Every time someone starts thinking about retirement, the very first instinct is panic – more specifically, money panic. It’s so uncomfortable that many people avoid the topic altogether, but how can that be helpful? They all have the same question in their mind: “How much money do I need in super before I can pull the plug on work?” I think it’s a fun number to contemplate. It’s also the wrong first question.

 

Your purpose in retirement doesn’t need to be grand. It just needs to be yours. Most middle class Indians, the salaried class jump straight into talking about retirement benefit funds, pension schemes, assets, and pull out spreadsheets, online calculators and doomsday scenarios, and then delay retiring while they wait for the “perfect” lump-sum number. Others avoid the conversation altogether. In the process, many end up chasing someone else’s idea of what a good retirement should look like, only to discover they’ve waited too long and are suddenly forced out by a round of retrenchments, a health issue or caring responsibilities.

 

But the starting point for a good retirement isn’t about the numbers. It’s personal. It’s about understanding where you are in life and setting a vision for the years you have ahead. Ideally one you can afford, but also one that genuinely reflects how you want to live and what you want to do with your time, health and best years. Ultimately, it walks you through five steps:

Thinking about your goals

Before you even glance at your pension fund and fixed deposits, ask yourself a few prickly questions. What do you want your mornings to feel like? Where will you be living? Who do you want to spend your time with? Are you planning to work part-time, or walk away from paid work completely? Do you want to travel – and if so, where and how often? Will you be doing some voluntary service in a project you are passionate about? Will you study or train for something new?

Then go one layer deeper: what does a genuinely great week look like for you? Not an idealised Facebook and Instagram version of retirement, your real expectations of life. The rhythm of your days matters more than you think once the structure of a hierarchical career stops.

These aren’t fluffy lifestyle questions. They’re the foundation of your goal setting, and this comes before the budgeting process. You simply can’t work out what your future will cost until you know what you want your future to be. And even the smartest financial adviser can’t set those goals for you. Only you can do that part.

Exploring how much is enough

Once you’ve mapped out the life you want, then you can start working out what it might cost. And this is where people often discover something surprising: their number is usually far more achievable than they feared.

The amount you need in retirement isn’t a single magic figure. It depends on four things:

1. the lifestyle you’ve just described
2. the income you actually need each year
3. how much comes from your remaining income sourses – pension, interests on fixed deposits and debentures, rentals etc.
4. your health, longevity expectations and family responsibilities.

Most seniors will draw their retirement income from a combination of pension, part-time work, investments, and savings. That means the big lump-sum question matters far less than people think. Health support from the government like Aayushman Bharat, Jan Aushadhi Kendra are also making retirement more affordable.

So the real question isn’t “What lump sum do I need?” It’s whether you understand how the systems of retirement work, how the layers of income you could have interact, and how to put them to work for you. True, government policies will change over time, but the fact that we will only go stronger economically as a nation is no more a subject of debate. So, for seniors, tomorrow is certainly rosier than yesterday.

Run the numbers – then get some help

If you’ve never run your own “retirement income” calculation before, this is the moment to start. You can do it yourself by listing your assets and liabilities or you can take the help of your chartered accountant or even a wealth manager for a small fee. I have in the past, written a blog on wealth management and you can read it by clicking: https://surajitbrainwaves.blogspot.com/2024/11/wealth-management-and-inheritance.html

Your pension fund can give you a projection either through their app or their guidance team. You can plug some numbers into a simple calculator. And then take a breath and think about what kind of advice you might need. If your needs are simple, this level of guidance might be enough. If they’re more complex, you may need comprehensive advice. Your mutual funds need a revisit, and if they are predominantly equity in nature, that type of risk is not good for your senior years and you have to change them to ‘balance funds’, which invest more in debt instead of all our equities. An overhaul your entire investment strategy at this juncture is mandatory.

 

Set up your retirement account and your drawdown

Once you’ve worked out roughly how much income you’ll need, the next piece of the puzzle is understanding how to turn your scattered funds into a regular income stream. You may not be withdrawing dividends but reinvesting them so far, because you had a regular income source, and you didn’t need the money. Now you do. So this is the time to change your mutual funds to devidend payout modality – yearly, half yearly or quarterly. Similarly, banks can be instructed to renew only the principal amount of your fixed deposits and pay out your interest to your savings account. The idea is to shift your deposits from the accumulation phase into the retirement, or “pension,” phase, where the goal becomes getting a steady, tax-free income while managing risk a little more carefully. The fact that seniors still have to pay tax on the interest their FDs earn is a prickly issue, which needs government’s attention.

This is the moment where planning becomes reality. Drawing a regular sum of money from your thus modified savings is a long-term strategy that influences every part of your retirement. You need to think about how much to withdraw, how often, and how you’ll invest the remaining balance so it continues to grow and support you for decades and all the things you can (or can’t) do with your money.

Spend too quickly, and you risk running down your balance earlier than expected. Spend too slowly, and you risk looking at a pile of money with regrets in your old age. A good retirement investment and drawdown strategy strikes a balance between having confidence and being cautious. It assumes you want your money to last, yes, but also that you want enough freedom to actually live the life you’ve imagined. And if you understand the plan, you’re less likely to panic when markets wobble because you’ll know you’ve planned for this.

Dig in on your sense of purpose

Ultimately, the reason you set up your finances is to give yourself the freedom to spend your time on things you enjoy, care about and feel energised by. These are things you choose, regardless of what they pay. And for many people, that shift can be surprisingly difficult to make.

Our identities are often tied to our work and our ego. Stepping away from a job, a title or a role can leave a space that feels uncomfortable until you consciously refill it. So take the time to reconsider what you value, how you want to contribute and what makes you feel useful and connected is an essential part of the transition. Your purpose doesn’t need to be grand. It just needs to be yours.

So if you’re thinking about retiring, start with the basics. And remember, retirement isn’t a finish line any more. For most Indians, it’s a long, gradual shift into a different way of living and earning. The more prepared you are going in, the easier it is to make good decisions and avoid the traps that catch people who leave it too late. I have a publication in the Indian Journal of Surgery o the retirement planning of a surgeon. You can read it by clicking: Bhattacharya, S., Bhattacharya, K. & Bhattacharya, N. Retirement Planning—Unpleasant but Mandatory for All Aging Surgeons. Indian J Surg (2025). https://doi.org/10.1007/s12262-025-04318-8