Part Two: Get Ready for Your Retirement Journey

You’ve spent years building a rich and fulfilling life, and now, as you step into your second innings—somewhere between 55 and 70— you realise it’s time to focus on what’s next. Maybe you’re thinking about picking up new adventures, connecting with friends, or exploring hobbies you’ve always set aside. For active adults in this vibrant age group, planning ahead means more freedom to enjoy what matters most. The good news? Preparing for these years doesn’t have to be complicated.

I got the inspiration to write this article as I was thinking about my own retirement and how I should go about managing my money for it. But before I got started on actually making and executing a retirement plan, I realised that the plan had to be comprehensive and address all the concerns of life post-retirement. Further, there is little chance to make up for your mistakes post-retirement, and hence it is critical to get it right the first time. Here is a checklist of things that I believe one must address in order to make a good retirement plan:

1. Set Aside Money for any obligations or Debt

While this is very obvious, it is worth reiterating. Before you start counting how much money you have saved for retirement, you need to keep aside some of it for any remaining obligations you may have, such as an outstanding loan, your children’s education, or their marriage. Once you have set aside some money for these obligations, you will have a fair estimate of where you stand in terms of the funds you have available for retirement. This basic step will give you a more accurate number to work with, and you can start planning your retirement accordingly.

2. Build an Emergency Health Care Fund

Everyone knows that life expectancy has increased due to better healthcare facilities, but seems to forget that better healthcare comes at a cost. While most of us have health insurance, we will only realise its coverage and assistance when we need to use it. Apart from that, we also have to account for inflation, especially in the healthcare sector. For example, we may have a health insurance cover worth ₹10 lakhs, which covers most procedures today. But in 20 years’ time, these procedures could cost double or even triple, while your Insurance cover has remained the same. Furthermore, there are many procedures that are not even covered by health insurance. Keeping all this in mind, one has to set aside some funds dedicated to healthcare. Ideally, these funds should be in a Fixed Deposit or a Debt Mutual Fund so that one has easy access to them and they can grow at a rate which is in line with inflation. For those without any health insurance, this becomes all the more important.

3. Planning for Regular Income – Adjusted for inflation

This is the core of retirement planning. While there are many options that can help you generate regular income post-retirement, such as fixed deposits, annuity plans, debt funds, etc., most of these plans do not account for inflation. Not accounting for inflation is the biggest mistake most people make while planning for retirement. While you should invest a large part of your corpus in guaranteed/ less volatile financial instruments, you should also invest some of it in comparatively riskier investments (Read: Equity), and let that money compound, so that overall, your retirement corpus keeps pace with inflation. If you invest all your money in safe products (which give lower returns), at some point, you will have to cut down on your standard of living. Always remember that what is adequate today will not be adequate in the future. Budget for this, especially since there is a good chance you and your spouse will live for 30 years or more post-retirement (without any additional income).

4. Leaving behind a legacy

Whatever Legacy you wish to leave behind for your children (or for any cause or charity ) should be planned separately from your core retirement income generation strategy. For example, a Return of Purchase annuity plan gives a much lesser monthly income than a plan in which the return of purchase option isn’t chosen. For the sake of leaving a legacy, you will compromise on your living standard. Instead, a separate fund should be set aside to ensure that you leave behind an adequate corpus. For example, if you were to invest just 3.5 lakhs today, it would grow to about Rs 1 Crore in 30 years (assuming a return of 12% p.a). Such a rate of return is only possible in riskier investments. However, because you are only planning for a legacy and can leave these funds untouched, a relatively small amount can grow to a very large one due to the power of compounding.  

5. Keeping it Simple

Any decision you take regarding money management during retirement should be easy enough for your spouse to understand as well. Your spouse should not have any difficulty managing the retirement corpus if you are not around. This point is especially important for men, since there is a good chance that your spouse is likely to outlive you and would need to manage her finances for several years independently. Retirement is not an individual decision, and so one must ensure that both partners are involved throughout the process. It is vital to keep your retirement plans really simple.

Planning for the future is all about giving yourself the chance to live life to the fullest, especially during your second innings. For those in their fifties, taking a proactive approach to finances, health, and lifestyle can open the door to more opportunities, more adventures, and more time for the things you love. It’s about being ready to embrace each day with energy and confidence. A little preparation now can lead to a lot of peace of mind down the road. Here’s to making these years truly special—active, engaged, and full of new possibilities.

Follow the above steps to be retirement-ready and click here to learn how to start your retirement journey!