Money Multiplying News

Dated: 16-30 Nov 2022 Redg. No. RNI 21891/70 Vol. 53 No. 10/Delhi

RETIRING SHORTLY?

HAVE YOU PROTECTED YOURSELF AGAINST INFLATION, TAXES AND FALLING INTEREST RATES?

If you are retiring in the next 12 months, then this is probably the most important article that you are going to read. When you retire, your key objectives are to ensure that –

1. You never run out of money in meeting the living expenses and other important goals throughout your retired life i.e., you continue to get stable, regular, tax-efficient income for life from your investments.

2. The income is tax efficient, grows in line with rising expenses, and does not fall if interest rates fall.

3. The investments are liquid and can be used in case of an emergency at any point in time. 4. Your net worth, i.e., the value of your investments, grows at a pace faster than?inflation to ensure a visible improvement in your standard of living.

As improbable as these objectives may sound, they can be achieved by following a scientific process. This process is known as Retirement Planning, which essentially means preparing your retirement plan and making sure that it is implemented and tracked well.

Let us have a look at the key challenges that a retiree or a retired person faces and how retirement planning can help overcome them.

Challenge 1 - Lack of Visibility of income and expenses. Very few people know what their expenses will be after 10, 20 or 40 years from now. How do they then plan for the income needed and where it is going to come from? Retirement Planning, through its Life-Long Cash Flow plan, projects your expenses and income needed, into the future. Once you know how much you need, you can plan for it.

Challenge 2 - Inflation is the annual rate at which your expenses rise. As your expenses rise, your income needs to rise too to ensure that you don’t run out of money. How to make that happen, is the key. You cannot simply go to the banks and ask them to pay higher rate of interest just because your expenses have risen. You need to plan for it. With global debt levels where they are, expect interest rates to lag inflation for an extended period. So how do you beat inflation? Asset allocation can help. There are asset classes that beat inflation. How much to invest in which one of them and when is something that retirement planning can help you with. The next question is - are there investments that allow you to increase your income at regular intervals? A little out-of-the-box thinking here goes a long way in securing your post-retirement life from inflation.?

Challenge 3 - Falling Interest rates can dent your retirement income significantly. I know an investor who put a bulk of his retirement savings in bank deposits in 2018. Three years down the line, when the deposits came up for renewal in 2021, his interest income fell by 25%. But his living expenses had risen by 15% in the same period. With no other reliable source of income to fall back upon, he was really worried. Falling interest rates are a reality. 3 year bank deposit rates in India were at 9% in 2011-12. A decade later they had dropped to 5.5%. Anyone who invested a crore in bank deposits in 2012 and got a monthly interest income of Rs. 75,000 then, would see it fall by ~40% to Rs. 46,000 upon renewal in 2021. How do you protect against this? Again, there are instruments that provide Guaranteed, Tax Free Income for long term, say till age 99 yrs, with capital protection. How much to invest in them and when again is the key, where retirement planning can help.

Challenge 4 - Taxes can impact your net income post-retirement. Any person earning Rs. 1 lakh per month through pension or interest income after retirement, is effectively earning approx. Rs. 85,000 to Rs. 87,000 only after tax, under the current tax structure. Are there any effective ways to minimize this? Definitely yes. A combination of regular withdrawal strategies from mutual funds along with instruments providing long term guaranteed tax free income can help a lot.

Challenge 5 - Lack of liquidity hurts a retiree in case of emergencies. In their quest for safety and higher interest rates, most retirees end up investing a major part of their portfolio in instruments that are illiquid i.e., you cannot withdraw the investment with ease and in time. Many of these instruments come with long lock in periods and frustrating conditions, that prohibit withdrawals. How do you get over it without compromising on safety and returns? The above set of challenges are not unique to you. They are faced by every person who depends on regular income from investments to meet their living expenses. Most of them do not know how to overcome them. The solution lies in recognizing them and planning for them. A dynamic, diversified asset allocation approach is needed. You need to come out of your biases and prejudices for some asset classes and instruments, understand their true risks and rewards and then make an informed decision. All of this is made possible only through proper planning. This is what Retirement Planning does. Get your Retirement Plan today!

Life Insurance

In India as well, the interest rates on bank fixed deposits (FDs) have significantly dropped to a decade low, part of a worldwide trend where interest rates have been kept low, benefiting asset prices but disincentivizing savings.

Also, there are some other factors that create a need for us to get assurance and guarantee in our lives, such as longevity Risk. Increasing Life Expectancy has also become a major concern for generating Post-guaranteed income in the longterm.

To make your transition smooth post-retirement, book your Guaranteed annuity rate today to follow your dream and aspirations without worrying about income generation after saying goodbye to your 9 to 5 routine.

· Flexibility as?Retirement Investment available in installments in the form of Single/Limited/Regular premium payment option.

· Longer Deferment tenure available gives a chance to increase your pension at inception.

· Securitize your annuity coupon rate today for the next decades.?

· Lumpsum payouts at maturity along with annuity to meet your retirement dreams. · Options for Immediate/Deferred Annuity.

· Single & Joint Life Options.

· Waiver of premium options in premium payment term to secure your family’s future.

BEST OPTIONS AVAILABLE FOR PENSION PLANS

1. TATA AIA Fortune Guarantee Pension

2. Bajaj Allianz Guaranteed Pension Goal

3. ICICI Prudential Guaranteed Pension Plan Flexi

1. TATA AIA Fortune Guarantee Pension - How the Plan Works:

2. Bajaj Allianz Guaranteed Pension Goal - How the Plan Works:

3. ICICI Prudential Guaranteed Pension Plan Flexi - How the Plan Works:

Retirement is not the end of the road but the beginning of an open highway for accomplishing our dreams and aspirations.

General Insurance

HEALTH PROTECTION WITH A PROMISE OF LOVE

This is a unique health plan designed to provide unconditional support and care for senior citizens in their golden years. With coverage options up to 25 lacs, no sub-limits on common health conditions, health check-ups from day 1, a hassle-free claims process, and more, we assure healthcare and financial needs of seniors are taken care of with nothing but love.

Senior First Health Plan has been packaged with features that give senior citizens the assurance of good health at all times. So whether it’s multiple treatments in the same year for the same illness or coverage for consumables, health coverage for our seniors is constant and unconditional.?

· Reassure - ? Unlimited Sum Insured available

? Any number of claims can be made

? Maximum reassure SI for a single claim will be up to the base sum insured.

· No Sub Limits for common Health Conditions - No sub-limits for treatment of any particular disease/ health condition (Ex: Cataract, Joint Replacement, Renal Complications, etc).

· Cost Sharing Options - A co-pay or deductible is mandatory. You can choose a co-payment of 20%, 30%, 40% or 50%. Alternatively, you can choose a deductible amounting to 1/5th of your base sum insured.

· Safeguard Rider - An optional benefit which matches health coverage during medical inflation, pays for non-payable items and protects NCB during small claims.

· No Mandatory PPMC - Pre-policy medical check is not mandatory for policy issuance.

COMPREHENSIVE HEALTH PROTECTION WITH A PROMISE TO GIVE OUR SENIORS A SECURE SECOND INNINGS

How much does Senior First Costs? Mr. Shri Krishna is 65 years old; lives in Gurgoan with his wife. He decides to buy Niva Bupa’s Senior First product with a Sum Insured of INR 10 Lac. Here are the various options available with Mr. Shri Krishna along with premium:

Disclaimer: Bajaj Capital Limited (‘BCL’) has taken due care and caution in presenting factually correct data contained herein above. While BCL has made every effort to ensure that the information/data being provided is accurate. BCL does not guarantee the accuracy, adequacy or completeness of any data/information in the publication and the same is meant for the use of the recipient and not for circulation. Readers are advised to satisfy themselves about the merits and details of each investment scheme, before taking any investment decision. BCL shall not be held liable for any consequences, legal or otherwise, arising out of use of any such information/ data and further states that it has no financial liability whatsoever to the recipient/ readers of this publication. Neither BCL nor any of its directors/ employees/ representatives accept any liability for any direct or consequential loss arising from the use of data/ information contained in the publication or any information/ data generated from the publication. Nothing contained in this publication shall constitute or be deemed to constitute a recommendation or an invitation or solicitation for any product or services. Any dispute arising in future shall be, subject to the Court(S) at Delhi. Views given in the articles are the personal views of the contributors and not that of the company. Readers are advised to go through the respective product brochure/ offer documents before making any investment decisions. Disclaimer: The rates of interest are applicable as on the data mentioned here in above. The rate may be revised at the sole discretion of the respective companies inviting the Fixed Deposits without further notice. Printed by, Rajiv Wadehra, Published By, Raji Wadehra on behalf of Bajaj Capital Investment Centre Limited, Bajaj House, 97 Nehru Place, New Delhi - 110019, and Printed at Sundeep press C-105/2, Naraina, Industrial Area Phase - , New Delhi - 110028, and Published at Bajaj House,97 Nehru Place, New Delhi - 110019, Editor-Rajiv Wadehra (CIN: U0000DL1988PLC039417))