MAKE SURE YOU HAVE A STEADY CASH FLOW WHEN YOU RETIRE

Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi;} Our PersonalFinance Expert Will Guide You on Saving, Spendingand Investing In This Weekly Column Retirementis the time when you hang up your boots from the hustle-bustle of daily life,relax, do your own thing. As we say, it’s time to say: “Goodbye tension, hellopension!” Suddenly, from the risk of dying too young, you have transformedyourself to the category where the risk of living too long exists. The lastthing you want to do is to have your money run out before you do. Risks have tobe taken in a controlled manner, and post-retirement returns are thus assumedat 1% or maximum 2% p.a. over inflation. During one’s retirement days, the keyrequirement is safety, liquidity and tax-free returns. It is important toanalyse the pros and cons of some of the avenues available to generate cashflow. RENTALINCOME Apart from a self-occupied property ,all other real estate investments are made with the objective of either capitalappreciation — like the purchase of land — or to generate return on investment,as in the case of rental property. 2008 has been a rude awakening, and we mustprepare for the time when rentals may drop, and the property may remain vacantfor a few months. Depending on rental income for 100% of one’s needs may be arisk that needs to be mitigated before heading into the retirement days. DIVIDENDINCOME A few weeksago, a client approached me to plan some additionalinvestments for his mother who was a retired senior citizen. He did notwant to take risks with the investment and during the course of ourconversation, we realised that nearly a third of her income was being receivedby way of dividends. So, while she was averse to risk investing, she wasequally reluctant to reduce her shareholding because she was thrilled with thequantum of dividend that she would receive year on year. In this case, there isa need to reduce the risks that this client carries in her portfolio. ANNUITIES In all ourretirement planning calculations, we assume a life expectancy of 85 years formales and 90 years for females. However, no one can say today whether that isan underestimation or overkill. To do away with this risk, one can considerpurchasing of annuities which are paid for your lifetime, and on your expiry,to your spouse. Obviously, if one was to use this as the only source ofretirement income, the quantum required to be invested would be large, so it’sbest that about a third of one’s retirement requirement is met through thisroute. FIXED INCOMEINVESTMENTS Returns onfixed income investments are normally taxable. For the purpose of planning, itmay be best to consider these — like senior citizen bonds, post office schemes,fixed deposits — first so that the income is within tax exempt limit for seniorcitizens — Rs 2.40 lakh per year as per the latest Budget proposals. Practicalexamples abound which ensure income that is tax-free and carries minimalisticrisk for the senior citizen. The authoris the Managing Director and Chief Financial Planner of International MoneyMatters Pvt Ltd Courtesy:-ET dt:- 19-03-2010 Forinformation about real estate, real estate india, Indian real estate property,property in india, Indian property, apartments, apartments for sale, apartmentsfor buy, apartments for sale in delhi, apartments for sale in gurgaon,apartments for sale in indirapuram, flats for sale in delhi, homes, homes forsale, houses for sale, homes for sale in delhi, homes for sale in gurgaon,houses for sale in delhi, houses for sale in gurgaon, property investmentoptions in delhi, investment option in real estate, real estate consultant,real estate agents, real estate developers and many more   log on   to http://www.zameen-zaidad.com and http://propertycafeteria.com/    

Was this helpful? 0 0 Comments

You're reading MAKE SURE YOU HAVE A STEADY CASH FLOW WHEN YOU RETIRE.