How do you de-risk from outliving your savings?

Ensure a comfortable retirement by investing in ULIP Pension Plans to counter inflation and secure guaranteed income for life.

In today’s world a nagging question for many Indians is, Will I have enough money to last through retirement?

It’s a valid worry. Life expectancy, already about 72.5 years, is expected to cross 85 by the end of this century. At the same time, healthcare costs are rising. And inflation? That’s silently eroding the value of our money year after year. A recent survey showed nearly 4 out of 10 working Indians fear they might outlive their savings. So, what can you do?

If you retire at 60 and live till 85-90, retirement can easily last 25-30 years. That’s almost equal to your working life. Let’s say you plan to spend ₹50,000 a month in retirement or ₹6 lakh a year. Over 30 years it’s ₹1.8 crore without accounting for inflation.

Now add inflation at, say, 6%. That ₹50,000 monthly budget could become ₹1.6 lakh in 20 years. And that’s why you need more than a “big enough” retirement corpus. You need a strategy that helps your income keep up with rising costs. Let’s look at some key risks which can erode your wealth.

Think ₹1 crore is enough? At 6% inflation, the real value of that corpus halves in 12 years. To counter the effects of inflation, you should keep a portion of savings invested in inflation-beating assets that invest in equity market. Unit-Linked Pension Plans are specifically designed to help you build a retirement corpus which helps generate guaranteed income after retirement.

These plans work best if you start investing early. A ULIP Pension Plan has two phases: Accumulation phase and payout phase. During working years, you accumulate a big corpus by investing regularly and earning market-linked returns on the investments. And when you retire, you can withdraw a certain portion (up to 60%) of corpus tax-free and also get regular guaranteed income from balance amount.

A great feature is you can invest in a mix of equity and debt funds and switch between them. So you can stay equity-heavy in accumulation phase for faster growth and when nearing retirement you can remain debt-heavy to preserve capital.