Can lead retirement life without risky assets

I , Banu Chander ,retiring this month and I will receive monthly pension of Rs 8000 for life, besides that i will be covered under the employer group medical for Rs 2 lakh till 70 years.

I would like to know whether my current savings and the retirement benefits are sufficient to take care of my monthly needs of Rs 15,000 till 85. Since I am single I am planning to bequeath estate to my nephew. If I have surplus I may wish to visit places.

I currently own a flat worth of Rs 1 crore, my current outstanding in PPF is Rs 16 lakh.I have invested Rs 15 lakh in shares. I will receive Rs 18 lakh as my retirement benefits. Besides that I have jewellery and diamond worth of Rs 10 lakh.

Solutions: With your current savings you can lead a comfortable retirement life without investing in risky assets such as equity and real estate. With your pension income accounting for more than half of your monthly requirement, with interest rates are ruling high investment in pure debt will help to meet the short fall. However, if you live past 80 you may face deficit in your monthly income.

Assume the current monthly expenses of Rs 15,000 inflated at 7 per cent your monthly requirement at 70 will be Rs35,000 and at 80 it will be Rs 69,000.Considering your pension is growing at the rate of 4 per cent every year, and deploying all your current investment in debt a sum of Rs 49 lakh (PPF,shares and receivable retirement benefits) and if  its earns a post tax return of 7 per cent you will receive a monthly interest of Rs 28,600.To meet the short fall its better to start a SIP for Rs 5,000 from your current monthly surplus and it its earns a return of 10 per cent at 75 you will have a corpus of Rs 20 lakh as a cushion.

It is better to protect your saving by buying additional health insurance for a sum of Rs 3 lakh with an option to increase the sum insured every year by five per cent. While taking the policy its better to take a comprehensive health policy that not only goes beyond hospitalisation expenses, but also offers coverage for outpatient treatment. Currently such policies are available at a premium of Rs 15,000 per annum.