“The central goal of a well-executed retirement investment would be to live off the asset and not on the asset.”

Diversification forms a critical part of the retirement investment strategy. It is essential to ensure the risk from over exposure to one asset class is minimized. By balancing investments over time across multiple asset classes, investors can ensure accumulation of sufficient retirement corpus.

Bill Gates once said, “Most people overestimate what they can do in one year and underestimate what they can do in ten years”. The primary aspect of retirement planning is to think long-term and to start immediately. Once this is done, one can start looking at products and solutions that will help in building a secure retirement corpus.

Santosh Joseph, Founder and Managing Partner- Germinate Wealth Solutions LLP said that retirement planning products are largely classified based on the risk perspective. Some investors might be comfortable with an adventurous style of investing whereas some prefer a conservative and moderate approach. In each of these styles, one builds their retirement portfolio with a certain element of return expectation. “The central goal of a well-executed retirement investment would be to live off the asset and not on the asset,” he prompted.

Here are a few retirement planning products that one should opt for:

=| Equities: Equities offer great growth potential for a disciplined investor. As opposed to the popular misconception that equity investment is risky, if done right this asset class can generate tremendous value in the long term. There are multiple options available for investors to invest in equities. “Buying share from the market, investing in Mutual Funds and ETFs are popular means to invest in equity. In addition, employees can purchase shares by participating in ESOPs and IPOs offered by their employer. Investment can be done in a lump sum or in a staggered manner via SIPs.  Equity investment has the potential to beat inflation and deliver superior risk and tax-adjusted returns in long term. Dividends, bonus, splits all add further value. Dividend Plans or Systematic Withdrawal Plans (SWP) of mutual funds can help generate a sustainable income,” said Joseph.

=| Fixed Income: Like equities, Fixed Income comes with a variety of options. These are popular and hugely accepted.  Depending on the choice, one can opt from a combination of PPF, FD, Tax-free Bonds, Company Deposits and Government securities. The hallmark of this asset class is stability and some of these are backed by the government. “Fixed Deposits can provide instant liquidity at any time. For emergency, one must park a small amount in FDs in the retirement portfolio to meet such emergencies,” said Abhinav Angirish, Founder- Investonline.in.

=| Health Insurance: Insurance is to protect you from using up or spending your savings, not to earn a return on it. “Health insurance is typically not an investment, one should consider investing in it early on for two reasons. Firstly, as one grows older insurance becomes more expensive. So it’s important to invest early to avail the best price. Secondly, health issues might arise without a warning. A health insurance will cover your costs during medical emergencies,” said Joseph.

=| Invest in NPS: Since NPS is a long-term investment product, it helps in creating a habit of doing long-term savings for retirement. If you are not comfortable in making a good investment decision for your retirement, NPS is again considered to be the best bet in such case. Also, while doing regular savings every year during the accumulation phase, post-retirement, you get a good regular income which can act as a pension income for yourself.

=| Own a Home: Investing in real estate and getting a house for yourself on time is a good investment to secure your retirement. “Owning a house that’s free of encumbrances and debt provides a sense of permanence and stability during the retirement years. It’s important to make sure that you wouldn’t be paying rent or EMIs during the retirement years,” said Joseph.


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