4 Pre-Retirement steps in your 50s

Retirement, if planned carefully, can be the most joyous period of your life. It is true that you run around your whole life and leave no stone unturned for your family’s comfort.  Perhaps, retirement is the time when you think about yourself and get down to doing the things that you couldn’t earlier. However, all of this requires a very pragmatic approach from the beginning of your career, to ensure that you have enough corpus to really be able to pursue your dreams.

If you are nearing retirement, let us go through a check-list together. This, to ensure that you haven’t missed out on any of the more relevant things.

Have you paid off all the debt?

You don’t want to carry the burden of debts into a stage in life where the source of income closes down or diminishes. In an ideal world, this will be the case. But if it isn’t in yours, don’t fret! What is required is a re-visit to the payable’s column of your life’s balance sheet. Now depending on your appetite, you can either- pay off all of it or start with the higher interest rate ones. As the income diminishes, these debt payments acquire a significant share in your pension income.

Is your retirement income sorted?

It is a regular practice for people to be investing in pension plans to ensure income flow during the retired years. Well, it is a wise thing to think of making this provision but it might be wiser to look for an investment vehicle with better returns. And it is never too late! When you do that, do it with inflation in mind.

A pension plan will typically fetch you 6% – 7% returns. Now if you factor inflation and taxes, yes pension income is taxable, your real rate of return is actually negative. This means that you might not be able to meet your expenses, while the money de grows. A better approach would be to invest in equity mutual funds and allow the money to compound at 12-15% rate of return. Later when the time arrives, a systematic withdrawal plan can replace your monthly income and at the same time, the money has grown multi-fold.

Keep your emergency fund liquid

Like it or not, the bones are getting older and so are we. The visits to the hospital might get frequent. Your emergency fund will become heavier for obvious reasons. However, it is a common practice to leave this fund in your savings bank account. Not such a good idea, we’d say!

The bank accounts give you a rate of return of 4% on an average and 6% in some cases depending on your account balance. How about we try a different approach? Let us invest this money in a liquid/ low duration mutual funds where the rate of return is 7-8% and the money is as accessible as it was in the bank account. Sounds good? It is a relatively safer fund with lower risks. You can further start a systematic transfer plan from the liquid fund to the equity fund of your choice, as the money keeps coming and is unused.

Check your insurance

Typically, when you are working the medical insurance is covered in your CTC and is the least of your worries. Not just you, your family is covered in the policy too. When you are about to retire though, you must opt for a medical insurance policy independently.

In most cases, the existing plans are happily extended by the policy providers. If this is not the case, a new policy needs to be bought for the same reasons as stated before. There are many websites that offer policy comparisons for the ease of an investor nowadays, making it much simpler to gauge the cost benefit of a policy.


If this checklist makes you feel you ought to be doing things differently, allow us to help you. WealthApp’s financial consultants can help you plan your retirement with great ease and as per your specific requirements so that you retire like a boss!

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