‘K’, aged 62, approached us for help with his retirement income distribution. He is a retired private sector employee. Thanks to his habit of saving regularly over the years, he has a corpus which would be more than sufficient to fulfil his needs, if allocated properly across multiple asset classes.
At this point, it would be worthwhile to recall Peter Kaufman who said: “The most powerful force that could be potentially harnessed is dogged incremental constant progress over a very long time frame.”
K lives with his wife ‘R’, aged 60, in Bengaluru. His two daughters are settled in Pune and Chennai. He owns a flat each in Bengaluru and Chennai. The flat in Chennai is rented out.
Here is a simple representation of their current financial position, based on the data the couple provided.
K was worried about the recent market volatility and had opted for mutual fund investments for its easy management and liquidity.
His wife was disinterested in learning about managing money at this age. She wanted a regular income of ₹50,000 per month, which would be more than sufficient to run the family.
They spend ₹30,000 a month towards living expenses, including food, communication, city travel, local expenses, flat maintenance, house maid salary, electricity and so on. R wanted to keep ₹20,000 per month towards annual expenses such as clothing, gifts for daughters and annual medical check-ups.
K’s main worry was the liquidity of his investments and how his wife would manage…