Budgeting is simply creating a plan to spend your money. This plan is the “budget” which allows you to determine in advance how much will you spend, where will you spend, and if you will be left with enough money by the end of it all. In simple words, budgeting is simply balancing your expenses with your income or cash outflows with your cash inflows.

Needless to say, budgeting is the single biggest tool you have to take control of your money, achieve your financial goals, and set yourself up for long-term success. You must already have been advised many a time to follow a proper, detailed budget. But do you? It is very rare to find any person who religiously follows budgeting. Perhaps only one in hundred may do some sort of budgeting exercise on paper every month. Is there a better, much easier way? In this article, we will attempt to take a short-cut to the entire budgeting exercise to encourage you to start on the path…

The guiding rules:

The idea is to create simple money boxes to bifurcate your spendings. To begin with, keep the boxes simple and easy to understand and bifurcate. As you progress and enjoy the journey, you may go into details and increase the type or number of boxes.

You may ask, how to manage? Well, to begin with, you may simply allocate money to the boxes in your mind. You may also keep a rough track of the boxes on paper - just to ensure that you are not way off the mark. In the starting month, you may skip minor expenses and record only major ones. However, the proper way to do will be to put your expenses on paper, at least once a week under different boxes. In the first month, you may also skip pre-deciding the allocation into different boxes and simply observe your expenses and then decide allocation from the new month onwards.

Remember, it is not important how elaborate plans you have made. What is more important is what you can track religiously. It is like running a marathon, your timing, speed is not important, what is important is that you cross the finish line.

Spending Boxes:

Let us start by making four simple boxes to account for all your cash outflows.

1. Box One: What you Owe:

Perhaps the challenge for most households would be payments towards your monthly commitments. This is the box you cannot avoid and has to be accounted for anyhow. This would include your home rent, home /car /personal care EMIs, society maintenance, etc. Consider yourself lucky if such expenses are below 20% of your income. However, you are in the red zone if it is over 50%! If it is so, you will need to immediately start thinking of reducing your loan burden and/or look at increasing your income sources over time.

2. Box One: Living Expenses:

Next comes the living expenses which again one may not compromise. School fees, groceries, utility bills, medical care, maid salary, tuition fees, mobile/cable/internet recharges, etc are the expenses falling under this box. These expenses are relatively stagnant /fixed for the month and do not change often or by a big margin. This box should ideally not take more than 20-30% of your cash inflows. Again, if it is more, it would simply mean you are living beyond your means.

3. Box Three: Savings:

Next in priority would be all your cash outflows towards the non-expenses, ie., insurance and investment payments. Club all your yearly /monthly expenses together to arrive at a fixed allocation every month and save accordingly. This would include your life /health /motor insurance premiums, mutual fund SIPs, bank /post office recurring, PPF savings, etc.

Among investments and insurance, priority should go to insurance as protection is for today’s financial security and survival while wealth creation is for tomorrow’s financial well-being. Ideally, everything left after the first two boxes should fall into this last box. A minimum of 20% allocation should be made to this box and if it is over 50%, consider yourself fit for the next level of planning. 

4. Box Four: Optional Expenses /Discretionary:

Now we have reached the most interesting question. How much is left in your pocket by the month-end?

Ideally, if you have allocated all your money smartly, less than 10% would have been left. If it is more, there is a clear indication that more allocation needs to go to the Savings box. Ideally, 5-10% would be sufficient for you to spend on entertainment and other things. Simply put, if you are earning a lakh rupees, not more than Rs.5,000 should be spent on food or movies or shopping, etc every month. You can stretch it to max 10,000 but only if your savings box is over 50%.

If you have exhausted all your cash flow and are in fact in the negative, it is a big red zone! You need to immediately sit with your financial guide /advisor and find out how you can plan your finances better.

Saving Boxes:

If you feel you are putting a good amount of money into this box, it should be interesting to peep inside and try to further define another set of boxes within this savings box. Why? Because the savings box is a very important box which is directly associated with your continued and future financial well-being. This box deserves a further breakup to ensure that you have covered all aspects of your financial well-being adequately.

1. Box One: Insurance /Protection

The most import box comes first. Ideally, if you are saving over 20-30% of your income and out of that insurance premiums are over 30% (of savings) then perhaps your choice of insurance policies needs to be seen closely.

Traditional life insurance plans (like endowment /money-back /return of premium + bonus plans, etc) offer little in terms of protection cover /sum assured and but comes at a very heavy cost of low returns on the heavy premiums you pay. A good insurance portfolio would comprise of Pure Term plan + Health Cover + Personal Accident Cover + Critical Illness cover. Sit with your financial advisor today sort out this box

2. Box Two: Long-term wealth creation

This is the box, where your ‘real savings’ for a better, secure future where you desire to spend towards your life goals like marriage for children, home purchase, second home and most importantly - towards your peaceful and financially secure retirement. Needless to say, the more you save, the better it is. Ideally, you should at least aim to save 20% of your income towards this box.

The best way to plan for this box is to go into reverse! Start by first identifying your life /financial goals and then by estimating how much of mutual fund SIP would you need to fulfil those goals? That should be your allocation to the box - it should be pre-decided and not left as the result or output after everything else. Ideally, it should be over 60% of your savings box.

3. Box Three: Short-Term money deployment

Finally, we come to the box wherein you would like to keep some money handy. These would count your cash holdings at holding, bank balance, savings towards emergency fund (if planned), etc. This should also cover money you wish to keep aside for upcoming big expenses like purchase of electronics /holidays /festivals /family events and so on.

Instead of dipping into your long-term savings, which is a strict ‘no’, to meet such expenses, we highly recommended that you plan in advance and save in parts in the preceding months before the expense happens. This is help you do two things - (a) avoid cutting your long-term money tree when they are young and (b) avoid taking loans /credit. Ideally, 10-20% of your savings box may be allocated to this box.

Conclusion:

Those who fail to plan, plan to fail. The money box approach is a good way to begin planning your finances in an interesting and easy fashion. Again, what is important is that you actually begin, do this consistently for a few months, develop the ‘budgeting’ habit and then move on to detailed plans, if required. We are confident that such an exercise will surely help you understand your own status and also help you set targets to achieve in the coming months.

The Covid-19 pandemic has led to a vivid change in people's attitude. With time spent at home and the growing uncertainty of life, people have realised that they need to balance their work-life with personal life. A lot of awareness has also spread on the importance of savings and financial well-being. Interestingly, people have also started setting some unconventional goals for themselves as they recover from the pandemic.

Generally, when we talk of financial goals, the usual life goals like education for the child, purchase of home, retirement, marriage for your children, etc., come to mind. However, now with changing times, the goals are also changing. In this article, we will explore some of these new unconventional goals and life-style changes people are increasingly adopting and how to plan for the same.

The unconventional goals:

1. Early retirement: This goal has topped the list for most of the well-earning employees and professionals. There is a realisation that conventional retirement at age of say 60 years leaves us with little time to enjoy life and/or do something which we really want to do. The new age for retirement for many is now 50 years or even 45 years. Needless to say, this bold step requires a lot of planning and is easier said than done.

2. Follow your passion as a career:We have seen a huge rise in the popularity of unconventional careers in the last decade. Such unconventional careers have also gained societal acceptance which was missing in past. We now see people following their passions with careers as social media entertainers, YouTube bloggers, fitness/yoga coaches, stand-up comedians, travel guides, trekking companies, adventure sports, authors, and so on. Surprisingly, even people with established careers are now looking to follow their passion and do what they like. Obviously, such a career switch, followed by success is not easy and takes time.

3. Farming: Across India, we now increasingly find people drawn towards simple living close to nature. Natural or organic farming has a huge draw especially given the health benefits such a lifestyle promises. Many have also explored this option as a substitute or a side-by-side project while continuing with existing career. With the growing awareness for good quality food and healthy living in a natural environment, this has now become a popular goal.

4. Start a Startup /Own Business. Another increasingly popular goal is to have your own startup. People are now passionate to leverage their skills, knowledge or entrepreneurship in new ideas and businesses. Not everyone wants to work for life as an employee. However, not all ideas get easily funded in advance and a lot of startups are bootstrapped, meaning funded by their own funds.

5. Break from Career: Earlier, this idea may have raised eye-brows but not now. Especially popular with millennials, the idea is to take a break for a year or two and try to either follow /test your passion or just do what you always wanted to do. After this sabbatical/break is over or enough, one would go back to their career of choice.

6. Education from reputed college: People who have now gained some experience and are looking to grow in their careers, are now increasingly looking for an education from reputed colleges across India and even beyond. Especially popular are MBA courses for experienced professionals which, even though expensive, looks a good deal from the perspective of getting a brand name, networking and a career boost.

7. Medical Kitty: There is now a realisation that you need to have a backup plan in case of any emergency. While acceptance and awareness of health insurance plans have greatly increased, people now also realise the need for corpus for medical expenses, especially for the elderly.

8. Continued education & skill development: With growing competition and rapid advancement in business environment, there is a need to keep updated. Professionals and employees today are will willing to spend money to stay up the curve. This means completing short courses, attending seminars on knowledge, skills development and networking. This too is now becoming very common, especially in metro cities.

9. Pursue a hobby seriously: Whether be it bike riding, trekking, scuba diving, cycling, fitness or just travelling, people are now increasingly spending a lot of time and money in pursuing such hobbies. People want to pursue them to reach somewhere where they can be considered as 'pro' in such activities. It wouldn't surprise you how many people are now planning for all India tours and even multi-national tours in their cars and bikes. There are many who go on Himalayan treks every now and then. People are now pursuing certificates in activities like fitness, yoga, scuba-diving, sky-diving, para-sailing and so on.

Planning for such goals:

Obviously, apart from deep passion and interest, finance is something that is core to any unconventional goal that you may have for yourself. Various goals need a different kind of planning depending on factors like (a) time horizon (b) frequency, if not once and (c) funds required. Obviously, the need or necessity for any goal is something intangible that you need to decide.

The starting point of all goal planning is a clear understanding of what is needed. There can be two broad variations in the goals discussed above, one which is a one-time goal and the second, which is a recurring goal. For both these type of goals, we must sit and discuss them with an expert so that things can be put on paper.

There is no short-cut and if you are really passionate about pursuing any goal, whether conventional or unconventional, there are few things that you should keep in mind.

1. Save and invest: There is no doubt that you must aggressively start saving else you will keep burning whatever you have in pursuing your passions. Depending on your personal goals, the choice of the asset class and product will be made where such savings will be invested in.

2. Control Spendings: While aggressively saving is one side of the coin, cutting down on avoidable /unnecessary expenses is another side. Obviously, your love for a passion or commitment to a goal will determine the extent of how much you cut down on your spendings on shopping, entertainment, gadgets, etc.

3. Create multiple sources of income: Having alternate sources of income is one of the greatest secrets to wealth creation. The alternate income can easily be directed towards funding your passion so that your usual income is safeguarded and saved towards your usual life goals. Focus on creating multiple sources of income, even with whatever passion you are pursuing.

Conclusion:

There can be no judgements on whether any goal is too unconventional or not. It is your life and you will want to live it fully without regrets. It is important that you have a clear understanding of what you want to do and to pursue it with all your passion. However, it is also important that you do not lose track of your responsibilities and commitments to your family. Striking balance is not easy and that is where planning comes into the picture. Sit down, take the help of your advisor, plan what is feasible and go ahead with the same. There is no stopping you to achieve whatever dreams you may have.

We all have certain dreams and aspirations in life. We want to own a nice house, we want to send our kids to the best schools and colleges, we want to have six pack abs, we want to see the grandeur of our daughter's wedding. And the bulls eye, to have a Happy Ending; a worry free, healthy & peaceful Retirement. For many people, these goals are always on their mind. Their goals are properly documented in terms of the future cost of the goal, the exact number of years from now when the goal would arrive, etc. They are constantly preparing for these goals by saving and investing regularly. Then there is another set of people who believe that goals are the biggest source of tension in a person's life, they bring in nothing but stress, this set of people live in the present and want to handle things as they come. They too have some dreams hovering in their mind but they just don't want to prepare and want to live worry free.

So, which set do you belong to?

If you belong to the latter set, then do you need to give a second thought?

Probably Yes. Your goals don't pluck away your happiness, rather they continually restore your good night's sleep. Let's see how:

Our goals keep us going, they motivate us to plan and work for them. An athlete running a 500 m race will be fueled for the event, will showcase a round of exemplary dedication and perseverance, because he/she can see the target, the finish line which is 500 m ahead. If there is no goal, no finish line, the adrenaline rush in the athlete will be missing, the spirit to make it first would not be there. Similarly, our goals serve as a purpose for us to be passionate about and to sweat for. The goal, be it financial, buying a house in the next 5 years and stretching your limits to save and invest for your house, or otherwise, going for a trek to the Himalayas and preparing your body for it, you need to “have” a goal to work for it.

Goals give us a direction in Life, There are students who are about to complete their masters and still don't know what do they want to do in life, they are likely the ones who will eventually be hopping from one job to another until their 30s or even 40s struggling to find the perfect fit. The one who has a clear head from the very beginning, who knows what exactly he wants to do in life, will know what to focus his time and energy on, from an early stage.

Our goals keep a check on our spendings, This happens primarily because of the investment commitment for the goal. A slice of your income goes towards your goals, you are left with lesser disposable income, so automatically your discretionary expenses come down.

Also your goals do not let you take impulsive decisions, by nudging at your elbows whenever you are about to spend on something which you should avoid. When you are about to spend on a fancy gadget like an iPhone X, your goal of the dream home comes flying in, stares into your eyes and asks, “What are you doing? What about me? You shouldn't be spending like this” And suddenly you realize that your priority at this point in time is buying the house, so you change your mind, buy a One Plus 6 instead, and direct the surplus money towards your future home. This happens because our goals help us prioritize.

Planning for goals help avoid the last minute stress,Whether you foresee and plan for them or ignore them altogether, your goals will arrive. Your kids will grow up, you have to provide for their education and wedding, you will grow old, you will need money to survive in your old age. It will be a smooth ride for the one who visualized and prepared for these goals, and for the who was living in the present, these goals are likely to give him a tough time, he will have to sweat for arranging huge sums of money in a short period of time, and at the end he may or may be able to fulfill the goals in the way he wanted to.

To conclude, our goals don't really give us stress, they give us the motivation to live. They give us a way of life. And everyone has dreams, there is a need to identify, define them as clear goals and plan for them. So stay focused, go after your dreams and keep moving towards your goals!

Retirement period is considered to be a new beginning for an individual. It is the time to unwind and pursue hobbies which you were not able to pursue due to lack of time during your working life.
Your post retirement period can be the most relaxing period of life after long working years, but also on the other hand, it will be a period when fresh income will stop and you will have to manage with whatever retirement corpus and/or pension you receive. With higher life expectancy, increasing cost of medical treatment and double digit inflation, life looks more challenging for a retired individual.

With urban Indian, the biggest challenge of retirement life is perhaps increasing life expectancy with advancement of medical treatment but coupled with rising medical costs and with private employment & lesser possibility of employer sponsored pension, we all may need to fund around 25 years of retired life from our own savings if we consider retirement age at 60 and life expectancy of around 85.

Interest earnings from debt / small savings have been the traditional source of income for retired individuals. Looking at the bigger picture, we find that typically, interest rates are high in underdeveloped and developing economies but in developed economies, they are relatively very low. Prudent economics encourage the government to bring interest rates down or aligned with market rates for government sponsored saving schemes like PPF, Postal Schemes etc. We have already seen a declining trend over the past decade in such products. With falling interest rate scenario, only debt retirement portfolio will not generate return sufficient to meet rising expenses during retirement period of 20-25 years. This leaves very little option for a retired individual to look for in terms of investment instruments which can generate inflation beating return.

Inflation: The crux of the problem
During working life, the inflation effect more or less get nullified as your income grows faster or in line with inflation rate but during retirement, inflation eats into your savings as you stop generating additional income. With stagnant and/or slow moving pension, inflation greatly increases the gap between expenses and cash inflow during retirement. This becomes very critical when we consider extended periods of retirement of over 20-25 years. So it becomes imperative that your portfolio fulfills either of the 2 conditions in face of rising expenses and falling interest rates:

• Your retirement corpus or any post retirement portfolio be of such huge size that all future expenses can be managed by earnings and withdrawals.
• Your planning focuses on both current earnings and also future growth of portfolio. Here you would need to generate inflation beating returns.

The Bucket Idea:
We can represent the entire portfolio planning exercise in a simplistic bucket concept. The simple rules of this idea are...

• Each bucket represents a different need/objective and aims to fulfill the same and one should evaluate it according to its objective
• One should not compare returns from each bucket in the same time frame as buckets would be for different time frames
• The buckets must consider your entire portfolio in all asset classes. Remember to plan your buckets with your financial adviser with proper disclosures.

Just to briefly state at the beginning, there are different baskets and you must choose baskets as per your own objectives and needs. To begin with, let us ignore the size of the basket as it would be explained later.

• Bucket 1: For emergency funds / short-term expenses /planned medical expenses
• Bucket 2: For generating earnings/income for meeting expenses – either by pure earnings or with capital withdrawals as option in rare cases
• Bucket 3: For ensuring portfolio growth and ensuring total 'value' of portfolio is kept intact even after inflation
• Bucket 4: For generating good wealth in long to very long term

Now we begin choosing the buckets, one at a time. Remember, that estimating the need and size of the bucket will eventually be the outcome of a thorough financial /portfolio planning with your adviser...

Bucket 1:
This is essentially your emergency fund for meeting any medical emergency or for upcoming /planned medical treatments, etc. The emergency fund should also cover your upcoming expenses for few months, say 3 at least, at all times. The emergency fund can be kept in bank or in cash though it is recommended that you keep only limited amount in cash if access to bank / ATM is convenient.

Bucket 2:
This bucket essentially is for generating returns /cash inflow for meeting your expenses. The objective here is to have regular flow of income ensured through interest earnings for the next 3-5 years at the upper end without facing any return/income fluctuations. This bucket is most important and must remain with you always such that projected cash inflow is always assured first.

Over the time, this bucket will lose value due to inflation and withdrawals, if any planned. With rising expenses, this bucket may need replenishment from time to time. Capital withdrawals should be avoided as far as possible especially if you are in the beginning years of retirement. Meeting expenses by withdrawals is recommended only when you are in later years of retirement / very old age as it comes at the cost of sacrificing future earnings.

On the other hand, in cases where there is good retirement kitty available, there can be a surplus cash generated over expenses. It is highly recommended to make proper use of this surplus and put it preferably in bucket 3 or 2, as may be required. Money can be withdrawn manually and with mutual funds, you can opt for Systematic Withdrawal Plans or SWPs with set frequency and amount.

Typically, fixed/regular interest paying debt instruments can be a part of this portfolio. It will predominantly be a debt portfolio and may comprise of PPF, Bank FD, NCD, Post Office Senior Citizen Savings Schemes, etc. In most cases, the size of this bucket would be the largest. Debt mutual funds are a very good match for bucket 2 as they offer great choice, comfort, features, liquidity, convenience and taxation advantages without any additional risks. There are products to match any investment horizon and one can choose from a wide variety of products to build a smart portfolio in debt mutual funds.

Bucket 3:
This bucket is for replenishing and/or generating additional value to your portfolio. The idea is to not let your total portfolio value decrease but grow especially in the beginning to middle years of your retirement period. You must gain more in long term in bucket 3 from what you lose on bucket 1 or 2 in terms of 'real value' after accounting for inflation. The size of this bucket would perhaps be the largest at beginning of retirement when you should plan for 20+ years of retirement ahead of you and start decreasing when you approach old age.

Typically balance funds or preferably diversified equity mutual funds can easily be put into this bucket. You can also add some component of gold here. With a horizon of 5+ years horizon at the minimum, this bucket should ideally create inflation beating returns.

Putting regular surplus savings, if any, into bucket 3 is a very good option as wealth can be generated without any big portfolio risk or volatility. Doing a mutual fund equity SIP from any surplus earnings from bucket 2 can be a very smart idea. One can also plan for Systematic Transfer Plan or STP from bucket 2 to bucket 3 using mutual fund products in both. An STP has similar advantages as SIP with difference that it is from an MF fund to an MF fund while in SIP it is cash being invested.

Equity is something that has the potential to deliver superior returns to inflation but only in long run. Exposure should be taken after your needs are safe bucket 1 and 2. Further, one must not lose sleep by seeing volatility in bucket 3 and if you are the one to loose sleep/ grow impatient due to market fluctuations, perhaps it would be wise to instead opt for peace and avoid investing in bucket 3.

As the idea is to also replenish bucket 2 by using bucket 3, one can shift money at regular intervals with adequate surplus value being realized. This can be an outcome of what the financial advisers often term as 'portfolio rebalancing'. The quantum of withdrawal should be limited to matching the real value of bucket 2 and that which is essential to fulfill the objective of bucket 2.

Bucket 4:
Having the bucket 4 is purely optional. This is a purely aggressive asset class portfolio with clear objective of capital growth in long to very long term, say 8+ years at minimum. This bucket makes sense to be chosen only at the beginning years of the retirement and it is something that the retiree feels free to forget and not use any time soon. We are planning for a long retirement so having this basket does carry some sense.

Diversified equity mutual funds, mid-cap / small-cap equity funds, etc. can be kept in this bucket. One can again have the option of investing small lump-sum at retirement and/or preferably start an SIP or an STP from bucket 2. At regular intervals after say 5-6 years, one can start shifting money /appreciation from this bucket to your bucket 2. The size of the bucket would obviously be small and smaller than bucket 2 and 3. Further, this bucket is not recommended in old age.

Total Retirement Portfolio:
One can have any desired combination of buckets but the popular options can be as given below. The actual size and quantum of money can be determined only after proper financial planning / asset allocation exercise.

• Bucket 1 and 2: An extra safe option but comes at sacrifice of real value of portfolio. In future, earnings from portfolio may not be adequate to meet rising expenses. Recommended when you have a very comfortable retirement kitty or other source of income /support
• Bucket 1, 2 and 3: A balanced portfolio that has some scope for preservation / growth of assets to compensate fall in real value. Generally recommended for all who do not have a very comfortable retirement kitty and have to rely on portfolio for meeting needs even in older age
• Bucket 1, 2, 3 & 4: An aggressive portfolio. Recommended only if you do not have any sufficient retirement kitty and need to have good portfolio growth in long term to meet expenses in older age. Growth must never be opted at the cost of earnings safety in foreseeable future.

	Bucket 1 : 5-20% exposure Products: Cash / Bank Balance / Liquid mutual funds Horizon: Immediate / very short-term / short-term
	Bucket 2: 20-60% exposure Products: Debt mutual funds / Bank F.D. / small savings schemes Horizon: short to medium term (<5 years)
	Bucket 3: 10-40% exposure Products: Balance funds, diversified equity funds, Gold Horizon: long (5-10 years)
	Bucket 4: 0-20% exposure Products: Aggressive equity mutual funds / direct equity Horizon: long to very term (>8 years)

Buckets & funds summary

• Retirement kitty can be well invested in buckets 1, 2 & 3.
• Regular expenses / medical costs, etc. can be met from Bucket 1 & Bucket 2
• Filling Bucket 3 from Bucket 2: Investing any surplus earnings, SIP or by STP
• Replenishing Bucket 2 from Bucket 3/ 4: By STP / Switch / shift at regular intervals over time

The Asset Allocation:
A popular perception is that post retirement, we must keep all assets safely into debt. Though this is actually a sound theory, it does lack in addressing the bigger problems it might generate in long term. The idea must always be to do a thorough financial planning exercise to estimate the real needs and then define a proper portfolio with sound asset allocation into multiple asset classes like equity, debt, cash and physical assets during retirement years. The equity component has strong applications and can be effectively used to make your retirement planning more long term sustainable and rewarding.

Typically, the asset allocation would be skewed towards debt. The physical assets like gold would be optional for diversification and inflation hedge in medium to long term. The equity part would be for meeting growth objective over a long term since the expected post retirement period can extend 20-25-30+ years. The long term returns potential of equity has often been talked about here and the SIP route definitely adds extra safety and comfort into the asset. Thus, when it comes to portfolio planning post retirement, one must at least consider multiple asset classes and take exposure with proper planning as per the need.

Going beyond portfolio & buckets !!

• If you have not yet retired, try to get yourself health / medical insurance as soon as possible
• It is recommended that you keep all valuables /jewelery safe / in custody especially if staying alone. Take extra care of your physical security.
• One can enjoy retired life only if he/she is healthy and fit. Maintaining a good lifestyle with diet/yoga/walks/exercises can keep you fit and healthy and also keep those frequent medical bills away.
• One can look for extra income by way of paying guests / rent of property
• Reverse mortgage can be looked at in absence of any financial support/income if you do not wish or need to give ownership of property to any dependents after you in inheritance

Summary:
Every individual who is retired or is approaching retirement, would seek a steady income flow post retirement to meet expenses. With expected long retirement years, it becomes a challenge and hence the traditional way of thinking has to be changed and an active portfolio management with focus on both safety and future needs has to be considered. There is now less risk that can be taken compared to the accumulation phase to provide a greater sense of certainty that assets will continue to support a comfortable retirement. However, at the same time, there has to be some capital preservation and growth over the time, to ensure that income streams keep pace with the rising cost of living. Such objectives can be conflicting, with higher levels and a trade-off between returns and risk has to be made. The Bucket concept is nothing but a simplistic representation of building a smart portfolio post retirement.

After years of working hard we should all not shy away from retirement but accept it as a fact of life and the dawn of the golden years of your life with immense possibilities. One can seek many pursuits in life and be more socially, politically or spiritually active in life. In this phase of life, money carries less significance in life but even then it forms a critical aspect as one has to meet the basic needs and be self reliant in leading a dignified life. Irrespective of what age one is, retirement planning is very critical and the early you begin, the more comfortable and peaceful your retired life can be. We wish and sincerely hope that every one of us enjoys a healthy and peaceful retirement.