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The Golden Opportunity of Golden Years by Neeraj Chauhan, CFP cm
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Retirement planning in india.

Aug 26, 2014

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Neeraj Chauhan

The elderly people are likely to be exposed to emotional, physical and financial insecurity in the years to come with the rapid changes in the social scenario and the emerging prevalence of nuclear family set-ups in India in recent years

There is an emerging need to pay greater attention to promote holistic planning including pension Planning, health care planning, fiscal discipline, savings levels etc. in the context of changing family relationships and severely lim¬ited old-age income support.

This presentation offers insights into the marketplace for retirement financial advice, What are the challenges faced by retirees, what financial advisers can do, how they can impact client’s life, and how clients can be steered toward good retired life.
We are now witnessing an acknowledgement among those in their 30s and 40s that working in retirement is, and may have to be, part of their formal retirement plans. Retirement planning no longer consists of simply putting money aside each month.
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Page 1: Retirement planning in india.

The Golden Opportunity of Golden Years

by

Neeraj Chauhan, CFPcm

Page 2: Retirement planning in india.

13/07/2014 Neeraj Chauhan, CFP

Page 3: Retirement planning in india.

By providing financial protection against the major 19th century risk of dying too soon, life insurance industry became the biggest financial industry of the century

Now

Providing financial protection against the new risk of not dying too soon enough may well become the next century’s major and most profitable financial industry

Peter Drucker

13/07/2014 Neeraj Chauhan, CFP

Page 4: Retirement planning in india.

Most Populous countries 2013

Country Population (in Millions)

China 1,357

India 1,277

United States 316

Indonesia 249

Brazil 196

Pakistan 191

Nigeria 174

Bangladesh 157

Russia 143

Neeraj Chauhan, CFP 13/07/2014

Page 5: Retirement planning in india.

Most Populous countries 2050

Country Population (in Millions)

India 1,652

China 1,314

Nigeria 440

United States 400

Indonesia 366

Pakistan 363

Brazil 227

Bangladesh 202

Congo, Dem. Rep. 182

Neeraj Chauhan, CFP 13/07/2014

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Emerging retirement income market

Neeraj Chauhan, CFP 13/07/2014

Page 7: Retirement planning in india.

Neeraj Chauhan, CFP 13/07/2014

Page 8: Retirement planning in india.

Neeraj Chauhan, CFP 13/07/2014

Page 9: Retirement planning in india.

By mid-century, this 60+ age group is expected to reach 19% encompass 323 million people, a number greater than the total U.S. population in 2012.

Neeraj Chauhan, CFP 13/07/2014

Page 10: Retirement planning in india.

Challenges

Neeraj Chauhan, CFP 13/07/2014

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Increasing Life Expectancy

57 59 60 62 63 64 66 68 69 75

0

10

20

30

40

50

60

70

80

Age

Age

Neeraj Chauhan, CFP 13/07/2014

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Significant health problem

Neeraj Chauhan, CFP 13/07/2014

Page 13: Retirement planning in india.

Almost one-half (47 percent) of older Indians have at least one

chronic disease such as asthma, angina, arthritis, depression,

hypertension or diabetes

Neeraj Chauhan, CFP 13/07/2014

Page 14: Retirement planning in india.

Fewer than 10 percent of Indians have health insurance from private

or public sources, and about 72 percent of health care spending is

paid out-of-pocket

Neeraj Chauhan, CFP 13/07/2014

Page 15: Retirement planning in india.

Can’t forecast size of their retirement bucket

Neeraj Chauhan, CFP 13/07/2014

Page 16: Retirement planning in india.

Too much life, not enough money as Less

than 11 percent of older Indians have a pension of

any sort

Neeraj Chauhan, CFP 13/07/2014

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Shift in formal retirement savings plan from defined

benefit to defined contribution

Neeraj Chauhan, CFP 13/07/2014

Page 18: Retirement planning in india.

Savings are frequently invested in low interest

bearing Instruments.

Neeraj Chauhan, CFP 13/07/2014

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Accumulated capital usually end up being

diverted to necessities other than retirement.

Neeraj Chauhan, CFP 13/07/2014

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Many Indians are heavily reliant on investments in property and are hence very exposed to illiquidity & movements in property values.

Neeraj Chauhan, CFP 13/07/2014

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Emotional bias

Fear

Aggressiveness

Regret

Susceptibility

Inertia

Neeraj Chauhan, CFP 13/07/2014

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Nuclear family Structure and inability of families to support

elderly

Neeraj Chauhan, CFP 13/07/2014

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Low financial literacy

Neeraj Chauhan, CFP 13/07/2014

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Silver lining

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High Savings ratio

Neeraj Chauhan, CFP 13/07/2014

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Growing Economy

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Expectations

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Education

Decision Support

Advice/ Marketing info

Healer

Trusted Counselor

Neeraj Chauhan, CFP 13/07/2014

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Delivery

Neeraj Chauhan, CFP 13/07/2014

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Retirement planning is smartly shifting purchasing power from period of high earnings (the working years) to those of low earnings (Retirement).

Neeraj Chauhan, CFP 13/07/2014

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Get real about Goals

Income

Outgo 13/07/2014 Neeraj Chauhan, CFP

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Right combination of retirement income tools for both

retirement accumulation

&

retirement distribution.

Neeraj Chauhan, CFP 13/07/2014

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Appropriate

Asset allocation,

diversification ,

rebalancing.

Neeraj Chauhan, CFP 13/07/2014

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Adequate Risk

management

•Red Zones

•Health

•Expect the Unexpected

Neeraj Chauhan, CFP 13/07/2014

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Fiduciary behavior

Neeraj Chauhan, CFP 13/07/2014

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A plan that alleviate their fear, allowing them to retire with confidence and leisure.

Neeraj Chauhan, CFP 13/07/2014

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Give an attitude of abundance over scarcity with focus on life time income and spending.

Neeraj Chauhan, CFP 13/07/2014

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Shift focus and spotlight from

Investment portfolio to human capital with life

cycle approach. Neeraj Chauhan, CFP 13/07/2014

Page 39: Retirement planning in india.

People care more about their lifetime standard of living than about their wealth and this requires a shift from return management to risk management.

Neeraj Chauhan, CFP 13/07/2014

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In the End

It’s all about Arranging lifetime consumption in the safest way possible given finite lifetime income over building largest possible portfolio constrained by risk tolerance.

Neeraj Chauhan, CFP 13/07/2014