Seniors Learn To Be Safe & Smart with Their Money
Moneylife Digital Team 08 December 2015
Specially designed seminar on retirement planning and investment for senior citizens
After several requests from its members in the Mumbai suburbs, Moneylife Foundation conducted a seminar on retirement planning and investing, for the first time in Navi Mumbai. Moneylife Foundation has conducted many such seminars for senior citizens at its Knowledge Centre in Dadar. This special seminar was held at SIES College, Nerul. At the programme—specially designed for retirees—Sucheta Dalal, managing editor of Moneylife and founder trustee of Moneylife Foundation, spoke about ‘Safe Investing and How Not To Lose Money’ and Debashis Basu, editor of Moneylife and founder trustee of Moneylife Foundation, discussed ‘Smart Investing’. 
The concepts were explained in an easy-to-understand format and dealt with issues like how much to save to maintain a comfortable lifestyle for 25 to 30 years after retirement and the ideal mix of assets to stop the erosion of savings due to inflation.
During the first session, Ms Dalal explained that people need to plan in such a way that their savings will be enough to cover their expenses for 25-30 years after retirement. They should be wary of trusting agents with their money, especially those who insist that they buy insurance policies in the name of their children or grandchildren. She gave a few real-life examples where senior citizens were cheated and their money invested in products that generate low returns at high costs, while the agent or distributor pockets the high commissions. She ended by giving a brief introduction on estate planning such as making a Will, setting up a Trust, gifting to relatives, insurance and nomination and the issues involving each of these.
In the second session, Mr Basu focused on how and in what kind of assets retirees should invest to beat inflation and ensure regular income in retirement years. There is no dearth of financial products; many that are directed at senior citizens are toxic products. Seniors may find it difficult to comprehend the financial risks involved. In fact, there are only a few products that retirees need, to generate inflation-beating income.
For retirees, it is important to choose safe assets; bank fixed deposits are among the best suited. But one can also pick from other options such as corporate bonds and short-term debt schemes of mutual funds. For those in the 20%, and especially 30%, tax bracket, an excellent option is listed tax-free bonds from government companies. An ideal asset-mix would depend on the age and the number of dependents of the person.
However, investing all the money in fixed-income products for the very long term may turn out to be imprudent, because these do not beat inflation. Retirees may like to invest some amount of money in equity mutual funds or stocks, especially at the earlier stage of their retirement. Mr Basu also explained the pluses and minuses of reverse mortgage. 
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