How Single Women Should Go About Planning Their Retirement   Apr 10, 2019


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(Image source: Background photo created by Dragana_Gordic - www.freepik.coma)

Women effortlessly slip in and out of each role and responsibility. But when it comes to financial security, they usually have to rely on a male member of their household.

According to census data, the number of single women has increased - from 51.2 million women in 2001 to 71.4 million in 2011. The reality is that women tend to live longer than their spouses.

Hence, the steep rise in the number of single women (unmarried, divorced, abandoned, and widowed), especially in India, warrants the need for them to attain financial security.

Hence, they seek employment.

But do they really plan for their retirement? Most of the women have jobs to give them financial security and for their survival. But building a retirement corpus still isn't considered an important financial goal.

On my way to a relative's place on a Borivali bound train, I bumped into my college bestie, Nirmala (31) after a decade.

When I asked her, 'Where have you been all these years?'

Nirmala narrated her sad tale about her divorce despite a courtship of five years. Her in-laws didn't want her to work and expected her to look after the family and household chores, which she obliged. But there were repeated instances of domestic violence and restrictions on her interaction with anyone. Finally, she took a stand and asked for a divorce.

Nirmala continued, 'I don't want to be a burden on my parents or brother! So, I stay on my own, pay my own bills, house rent, etc. My job helps me, Aditi, but I want financial security, so don't have to depend on anyone in the future.'

I responded, 'Have you thought about your life post-retirement?'

Nirmala being an intelligent, headstrong, and hardworking person leading an independent life responded in the negative.

I explained, 'Right now when you are working, you receive a steady supply of income, but have you thought about the time when you won't be working anymore? Savings in the bank will exhaust sooner then you even realise. The post-retirement phase till your demise is highly unpredictable. That's the time you require money to fend for yourself.'

Nirmala asked, 'Then what should I do?'

Start planning for your retirement immediately. Here are some points to get you started.

  1. List down your goals:

    Set goals - short term goals like purchasing gold/jewellery or a vehicle and long-term goals like owning a house or continuing education. Based on your life goals, you can evaluate how much money is required to achieve them. Remember that you have to factor in inflation.

  2. Build a contingency fund:

    In case due to unfortunate circumstances like a job loss, you need to create an adequate emergency fund to cover all your expenses for a period of at least a minimum of six months

  3. Create financial plan:

    A financial plan should ideally include your goals, the corpus you require for it, years you have to achieve those goals, and your risk profile.

  4. Choose an ethical and proficient financial consultant:

    If you cannot create a financial plan yourself, choose to seek the advice of an ethical, unbiased, certified financial consultant who puts your interests first and provides comprehensive and research-backed guidance.

  5. Plan your tax outgo:

    Ensure that you are saving while paying taxes that you can utilise to grow your retirement corpus. Hence invest in investments that will help reduce your tax burden.

  6. Get adequate medical insurance cover:

    Keeping in mind the rising medical costs, ensure that you do have an adequate medical insurance cover.

  7. Invest prudently:

    Depending on your goals, risk profile, investment time horizon, and tax benefits ensure that you choose the right mixture of various asset class to achieve each of your goals. Don't make investment decision based on random, free advice, or by aping relatives and friends.

  8. Do own research:

    Even when you have guidance from a proficient fee-based adviser, ensure that you do your own research and keep yourself updated. It helps you to stay informed to handle your finances well.

  9. Periodically review your plan:

    Regularly reviews will help you keep track of the growth of your investments so you can make the necessary adjustments to your portfolio and achieve financial freedom.

To point out, this isn't just for Nirmala. It's for every single girl and woman who wants to be their own knight-in-shining-armour moneywise.

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Author: Aditi Murkute



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