“The sooner you start thinking about this, the better it will be for your life.”, remarked Mr. Sanjay Sachdev, CEO, Tata Asset Management Company, as he was addressing the students Institute of Management, Nirma University, on August, 14, 2012. He was referring to Retirement Planning.
Retirement Planning is not an issue which is on the top of the mind of a student of MBA. But Mr. Sachdev emphasized the issue as most people realize its importance very late in their life. He said, “We are all in this sandwich situation, a grilled sandwich between parents and kids”. He also referred to the lack of planning in Indian which he said is connected to the level of education. “Education gets you moving forward and no one can take it away from you. It allows you to think forward and plan. It’s a means to an end. The better you plan, the better you’ll get ahead.”
He then addressed the issue of Why Retirement Planning? He talked of the various changes that have occurred in the economy and the lifestyle in India which have created the issue such as: Volatile Bank interest rate, nuclear family set-up, growing aspirations to maintain pre-retirement standard of life, increased Medicare exigencies due to inflation and higher life expectancy in India.
“Assuming 7% inflation, If you earn Rs 25000 today, to maintain the same standard of living 30 years from now, you will need Rs 190,306”. He also drew attention to the facts such as 78% of total health expenditure is privately funded, 30% people in rural and 20% in urban India skip treatment purely due to financial reasons. He also spoke of the 30-30 challenge: “30 years of working life and 30 years of retirement”
The session was an eye-opener for the students who are now better equipped with insights to look into this seldom-thought-of issue.
(Content courtesy: Mahima Singhal)