Indian market trends

The Sensex and the Nifty rose 1% each during the fortnight ended 9th May. ML Small-cap Index, ML Mid-cap Index and ML Mega-cap Index also rose 1% each. ML Large-cap Index advanced 2%, while ML Micro-cap Index declined 2%. 

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Fund flows

Foreigners: Foreign institutional investors were net buyers of stocks (Rs2,014.57 crore). They bought shares worth Rs25,242.70 crore. 

 

Indians: Domestic institutional investors were net sellers of stocks (Rs1,979.64 crore). They sold shares worth Rs10,904.30 crore.

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Retirement planning for the elderly
Retirement has to be an enjoyable experience, but if not planned properly can lead to a disaster. Moneylife Foundation today held a seminar tackling this important theme.

Moneylife Foundation held an exclusive workshop for senior citizens on “Planning Your Money-life Post-retirement” on 14 May 2014 at the Moneylife Knowledge Centre. The session was conducted by Sucheta Dalal and Debashis Basu, Trustees of Moneylife Foundation.  
 
Sucheta Dalal, managing editor of Moneylife, began the session by emphasising on how important safety, security and financial independence are for the elderly with the changing times. Ms Dalal took the attention of the audience on the increasing number of Ponzi schemes in the country which are more likely to con the elderly, as they form an easy target for the sales agent. According to the U.S. Federal Trade Commission, “80% of scam victims in the US are over 65”, which is a matter of concern, warning them to beware and distinguish purchasing consumer products from financial products. 
 
She suggests the use of the Moneylife Insurance Helpline, Disha- financial counselling or Abhay promoted by Bank of India for assistance on choosing the best insurance product and to avoid being financially conned. 
 
Ms Dalal further put light on the statutory provisions such as the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 which provides legal protection to senior citizens. Another important but less know act. The Married Woman Property (MWP) Act allows an individual to buy a policy for himself under the Act and create a trust for the same. The welfare of wife and children can be protected as MWP insurance policy is free from creditors and court attachments. Even the Special Marriage Act, 1954 is an important legislation which may act as a family certificate making any legal work hassle-free. 
 
She ended by giving a brief introduction on estate planning such as Wills, Trust, gift, insurance, nomination, etc and the issues surrounding them. Getting a Will right is crucial if disputes between heirs over legacy are to be avoided. “Nominations make things easier, but it’s important that people observe basic financial hygiene and keep updating their nominations” says Ms Dalal.
 
In his session, Mr Debashis Basu, editor and publisher of Moneylife, started by explaining the many unknowns surrounding a person's life before and after retirement such as “How much to save for retirement?”, “Where to invest?”, “How long should the savings last?”, “Expected Return of the portfolio?” etc. All these questions were explained in detail making the mindboggling financial retirement savings simple and easy to understand in the seminar. It’s important to save regularly to deal with big expenses such as education for children and more importantly for retirement. Thus, it’s important to spread risks and invest smartly. “It’s important to start saving as early as possible in order to save as much as possible for to create a corpus that will last 25-30 years post- retirement” says Mr Basu. 
 
In order to answer one of the most important questions, “How much is enough?”, it is important to define your retirement, set target for savings and save towards it, said Mr Basu. Mr Basu suggests the use of the financial planning calculators available on the Moneylife Savers website—savers.moneylife.in/calculators.html , to help make the number-crunching easier. An ideal asset-mix would depend on the age and the number of dependents of the person. 
 
He further emphasised on the new concept available for the “asset rich-but-cash poor” elderly called reverse mortgage. It is an agreement with a bank or a housing finance company, where they value your property and pay commensurate amount to you monthly. This amount can cater to your expenses. In case your legal heirs want the house to go to them, they can repay the amount. Or else, the bank sells your property, takes its money back, and pays the rest to your legal heirs. There are various reverse mortgage-enabled lifetime annuity plans such as- life annuity without return of purchase price or the amount spent to buy the annuity plan; life annuity with return of purchase price, which will be used to buy annuity for the spouse on death of the primary borrower; and life annuity with increase at a simple rate of 5% per annum and return of purchase price. 
 
The session was ended with an interactive session of Q&A with the audience having all their doubts cleared.

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COMMENTS

Gulobi Fernandes

3 years ago

Thank you very much, Sucheta and Debashis for your efforts at empowering us with financial literacy, through your MoneyLife Foundation programs and events.

Gulobi Fernandes
MoneyLife Subscriber

Dhaval Shahshikant Shah null

3 years ago

MONEY LIFE FOUNDATION REGULARLY DOING GREAT WORK TO GIVE FINANCIAL AWARENESS TO THE PEOPLE , FOR THE PEOPLE.

CONFRATULATION TO MR.BASU& MS. SUCHETA DALAL & ENTIRE TEAM.

I am very happy if by any means I can join & to be part as money life. I am eagerly waiting for any Financial awareness seminar in Baroda. I am very keen to attend any seminar . I was already one seminar in Ahmedabad.

Samantha Wright

3 years ago

This kind of seminar is very timely since people are living much longer and because of inflation. People concerned should plan ahead in order to have enough funds to support their desired lifestyle and other expenses. Most people fail to plan ahead and anticipate expenses like healthcare or long-term care. It's good that Ms. Dalal was able to answer the most important questions everyone asks when planning for retirement. A lot of people need guidance when investing their money and buying the right insurance products. I believe that insurance is important in retirement planning particularly long term care insurance since according to http://www.ltcoptions.com/long-term-care-insura... it helps pay for care expenses like nursing home, assisted living facility, CCRC and adult day care. I hope there will be more seminars like this because this can greatly people in planning for their retirement.

Samantha Wright

3 years ago

This kind of seminar is very timely since people are living much longer and because of inflation. People concerned should plan ahead in order to have enough funds to support their desired lifestyle and other expenses. Most people fail to plan ahead and anticipate expenses like healthcare or long-term care. It's good that Ms. Dalal was able to answer the most important questions everyone asks when planning for retirement. A lot of people need guidance when investing their money and buying the right insurance products. I believe that insurance is important in retirement planning particularly long term care insurance since according to http://www.ltcoptions.com/long-term-care-insura... it helps pay for care expenses like nursing home, assisted living facility, CCRC and adult day care. I hope there will be more seminars like this because this can greatly people in planning for their retirement.

MG Warrier

3 years ago

Great effort indeed. The information needed to 'start early' does not reach the real 'clients' at the right time and even if it reaches, the age group 30-50 just postpone even thinking about future as the savings needed will eat into their comforts. Now that all traditional safety nets are being destroyed or are getting disintegrated(yes, I have defined benefit pension schemes and joint family system uppermost in my mind), there is no escape from creating a well-balanced asset base to support oneself post-retirement or let me put it bluntly, post-job! Though it is not supported by any research, as one who has been watching the happenings in the wages-income-prices areas, my advice to the employed who depend on wages for survival is, save minimum 30 to 40 per cent of current income for retirement, assuming effective service period as 25 years and post retirement span another 25 years. Ideally, savings at a lower level should continue post-retirement, considering the rise in longevity.

Ramesh Poapt

3 years ago

Great! I Request ML to provide more details on reverse mortgage schemes and institutes which deals in that.

Paul dmello

3 years ago

Since I am about to retire could u enlighten me whether the gratuity amount payable can be kept at 10 lacs limit which I believe is an amount allowed by tax rules to go without tax. Is it legal for a company to use this as a limit though the gratuity amount by calculation could exceed much more. Thanks

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