On a Sunday afternoon, while flipping through the channels on the idiot box, I just caught a glimpse of the movie Baaghban and was just about to switch off the idiot box and go to take a nap. Somehow, a thought just came to mind and I decided to watch the entire movie.

There is this scene in the movie where Mr Bachan goes to his boss with an application to withdraw his Provident Fund prematurely to finance his son’s expenses. Being a banker by profession, the boss advises Mr Bachan that he reconsider  the decision since this is the only amount  remaining in his account since he has already withdrawn all the other benefits, and that he keep this money for himself when he retires.

Mr Bachan, with a smile on his face, in a cool manner replies that he has five, fixed deposits which would mature in a course of time and in case of his retirement, would suffice and that he can encash them at that time. What he was reffering to was that he had five children whom he can surely depend on. Why worry about that time when the value of the money that he has today is much more that what he will have at that time. What happened to those fixed deposits??

That is exactly the story of our life where we are dependent on children and charity, for our retirement. In spite of being intelligent and having the capacity, and the choice we never look at retirement as an option for the simple reason that we have time on our hands and we never take retirement seriously. We still believe that our children will take care of us.

Another very interesting aspect that Mr Bachan mentions in the climax where he gives this speech is that the younger generation has become so smart that they use every possible resource available, as stepping stone like a ladder to achieve their ambitions.  But then they forget that these are the same parents who were the first ones to hold their hands and teach them to walk and that someday they would also have to go through the same situation. Sad but true!! 

A recent released study,The Future of Retirement-It’s time to prepare’ by global Bankers HSBC, has some interesting findings.  

  • 58% of the respondents in India do not know what their retirement income will look like.
  • 59% of survey respondents in India understood their short-term finances very well.
  • The motives of saving are more skewed towards saving for children accounting for 35% of savings compared to retirement which accounted for only 12%.” 
  • At present, formal pension arrangements cover only 13% of the country’s paid employees in India, with a total of 284 million people without pension coverage.

India, being a young country by age, and fondly called “Youngistaan” where the average age is just 26 years. In 2050, the number of dependent adults in India will reach the number of dependent children for the first time. But then, one has also to understand that the longer the term for the investment, the higher is the amount of corpus that is generated and the cost of the investment is lower, whether it is life insurance or PPF or a pension plan.

With the average life expectancy in India around 80 years, the social values changing, coupled with inflation and the falling interest rates, a retirement plan is an important aspect which is missing in the portfolio of the average Indian population.

Retirement Investment is a Matter of Choice, Not Chance. You can decide when to retire, but unike Mr Bachan in Baghban, hope alone for a comfortable life after retirement will not help, working towards it works in a systematic manner will definitely will. Everyone has dreams, but then those dreams remain dreams if there is no proper plan and commitment from our end in order to achieve these dreams. It is said that “If you fail to plan, you are planning to fail”. It is true in every aspect, particularly in this journey of life. It is never too early to plan for your retirement just. The correct time is now!! Before it is too late!!