How to manage money if you are out of money after retirement?

Indians are probably the worst off in planning their retirement. Placing trust in Government and their kids to take care of them in their old age, many people barely have any money post their retirement. Know how you can salvage this situation by following certain steps.

Everyone wants to delay retirement because it not only brings health challenges, dependency but money crunch situations too. Though it is always better to save a corpus amount at an early age to earn the benefits of compounding, sometimes the situation may occur that is beyond your control.

Sample this, Mahesh a service professional working in a logistics firm was tempted to join the paint business of his brother named Ramesh, he was so attracted towards it that he decided to leave his service in middle and thus giving up the amount contributed towards the Provident fund, resulting into the loss of future. But that was not the first mistake that Mahesh did, he also delayed the regular LIC premium amount and finally forfeited the policy.

As time progressed, he ventured into the business, he opened the factory outlets for the same. But his lousy and carefree nature again led to the downfall of the business and thus he again decided to join the service industry, with an aim to earn the returns. Time flew by and his savings contracted, his expenditures expanded, thus when he retired he was left with no choice. Well, don't get amused this example is taken from a real-life scenario. So, now the question arises how Mahesh can manage money after retirement. The first option could be:

Join some consultancy firm- After retirement; landing into a job of your dreams is not possible. So, Mahesh can join some consultancy firm that can offer him contractual employment with no perks but a regular salary to raise his family.

Reverse Mortgage Policy- The reverse mortgage policy is especially meant for the senior citizens aged above 62 years. These loans can be taken from the banks by mortgaging their home to derive regular cash flow.

Think about the safe investments- As you retire, the risk appetite decreases. Hence, Mahesh can go for some conventional methods of investment like FD and Post Office Deposits that can offer him fixed monthly returns. Even he can join the Senior Scheme with a lock-in period of 3 years, but breaking this scheme would attract the penalty. It is better not to invest in the mutual funds that are subject to a market risk.

Rental Income- One of the best ways to earn income is offering the part of your home for rent. It will not only help you to fulfil the regular expenses but also help you to cover up the emergencies if any.

Taking loan against LIC- Though Mahesh committed the biggest blunder of forfeiting his LIC policy, a sensible investor can take a loan to fulfil the medical emergency or a personal loan subject to some stringent conditions.

If nothing else works, Mahesh could resort to his family or relatives for help, though it should be the last means. In the end, we would like to conclude, the people like Mahesh who fail to give up to their lifestyle habits even in the money crunch struggle a lot, hence as an investor you should spend money diligently. Plan your future by properly investing for your retirement, start SIPs in mutual funds plans as early as you start earning and enjoy the power of compounding.


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