With India having a rich tradition of respect and care for the elders, there is little need to diligently plan for the retirement. It is generally presumed that the extended family would take care of the financial responsibility for the older generation. But now with globalization (new opportunities around the world) and breaking apart of the joint family system, suddenly older Indians have become more responsible for their individual retirement security.
The main criterions to bear in mind while planning for the twilight phase of one’s life are security and stability of returns, liquidity, capital preservation and lower risks. One needs to plan for every need and contingency. Liquidity assumes great significance. With no salary or business income to fall back upon, the portfolio should be designed in such a manner that it provides a cushion for the regular expenses. Bank saving accounts give a nominal interest of 3.5% but they offer great liquidity as money can be withdrawn at any time.
