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Why save for retirement?

by | Sep 27, 2015 | Finance, Retirement

In the class on personal finance that I take, the typical student is in his early twenties and has just joined or is joining the work force.

Whenever I talk about saving for retirement, most guys lose interest and literally switch off. They just do not understand why I kept harping on an event which was more than 40 years away as far as they were concerned. I did not know how to get across the importance of the subject.

Then I came across an article and it was explained very well.

Around 40 – 50 years back, the life expectancy in an Indian Metro was around 60 – 65 years for working males. The retirement age was around 58 – 60 years. How many times have we heard the remark – “he retired and died within a couple of years”! Essentially, most people died just after retirement and there was no need to save for a life after retirement. Hopefully, a life insurance policy and other savings were sufficient to take care of the spouse.

However, nowadays, in spite of all the ‘lifestyle’ diseases, medical sciences have improved to such an extent that quite a few people routinely live upto 75 years. As health awareness improves, this figure is bound to go higher. However, the retirement age is still around 60. This means that one needs to save to live for 20 – 25 years after retirement!

There always is the one smart guy. He asked me “I will put in so much effort and save for 40 years, but then what will be the value of the money at that time? Nothing! Why should I bother?”

So what would be the alternate plan? Hope the government supports you? Depend on your kids to support you in your old age?

A retirement savings plan should be on the top of your investment goals.

Niranjan Bangera
36 Properties Pvt Ltd

Husband to wife:
After going through all our financials, I’ve come up with the best retirement plan possible:
At the age of 65, let us divorce each other and get married to other people who have saved enough for retirement!!


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Written By: niranjan

Financially Stupid Niranjan


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