Articles

WITH retirement on the anvil you are painting a pretty picture about lazing on the porch of your house, playing with your grandchildren, hearing the sounds of their laughter while reading the morning newspaper. No troubles in the world, no effort to overcome the many obstacles that come in everyone's life, just the joy of knowing that you are about to arrive into a state of bliss and that too well prepared! You consider yourself as one of the wise ones who not only read all the articles on retirement planning but actually made the right investment choices, with the right asset mix, invested the right amounts consistently, made sacrifices, cut costs and saved up, all equipped to take on retirement. So you have accumulated the desired corpus? Is that enough? Is that all there is to it? Will your investments selfmanage or do you withdraw the corpus and store it in a pot?

Just as retirement planning is an ongoing process before retirement; it needs to be reviewed more diligently when on the threshold and even more after retiring! Now that retirement is a reality, investment planning needs to be looked at with a different view-point.

o Maturity of your existing portfolio

o Immediate goals/requirements (having goals does not end just because work life has ended)

o Risk appetite (the pyramid should rotate 180o beginning with safest to riskiest)

o New investment horizons - be realistic

o Return expectations - be modest

o Capital protection

o Volatility check

There are many products offered by leading fund houses which make this transition possible. Depending on the risk appetite and investment goals, post retirement you should reallocate from risky investments to safer options in the form of shortterm plans. The returns in these may be low but then remember you are not trying to create a corpus but to maintain it! Capital safety is the key to post retirement investing.

Say you envisage that two years in your retirement you wish to take that long desired international holiday. For this you can reallocate your funds to more liquid instruments like short-term income funds that typically invest in corporate bonds with high credit rating and a residual maturity between six months to two years. These funds make its returns primarily from a mix of interest accrual and some amount of capital gains, thus keeping your initial investment intact. Hence you should focus on investment opportunities on the basis of your personal goals and requirement of funds.

If the requirement is within the next two years, then consider investments in liquid funds; if the horizon is five year or more then look at equity based funds, which focus on high quality Indian companies with proven track records and strong brands. However, if you feel equity is the way to beat inflation you could consider wrap products which are better than portfolio-building with individual funds. The blend of underlying funds in a wrap is calibrated to the client's risk tolerance, and this precise mix is maintained through automatic rebalancing. Wrap products give you instant portfolio diversification in a single product. But finding out whether they're the best investment for your portfolio takes a little work, but then you have all the time, spend it wisely. Lastly when reshuffling your retirement portfolio, take into account the relationship between return and volatility, that is, returns generated .

These are just some of the options. Debt products, bonds, debentures, National Savings Certificates are also available depending on how you want to invest your money and how much risk you are willing to take. Overwhelmed? A mix of these could give you the best returns.