Kolkata, December 18: If you are in your late 40s or 50s and have practically no retirement savings, it is surely a reason to wake up. However, it is never to start and even at this stage in your life, you can salvage retirement, though it will not be easy. Here are a few things you can do to make up for the lost time.
The first and the most obvious solution is to delay your retirement. Will your employer let you stay back in some capacity, as a part time or a consultant basis? If that is not an option, can you do a side gig to earn some money? There are several options you could explore from consulting assignments to home-based jobs which bring in an income. So you work as long as your health permits and do not retire. While this would take away some of the shine of your golden years, it is the most practical thing to do.
Ask yourself why you have no retirement savings. It would probably because you have been spending your entire income. It is high time you get a budget and make some serious changes to your lifestyle. While saving a part of the income is something one should always be doing, if you do not have any retirement savings and only about a decade left till your retirement, you have to save as much of your income as possible. If this means cutting down on discretionary expenses like eating out and entertainment, so be it. Save up as much as you can in the years you have left.
A retirement plan would work in the same way now as it would be if you were 30 years old. Have a retirement budget, take into stock any existing savings you have and make a retirement plan. It is recommended that you consult a financial planner. Since you still have 10 years or more, you can invest heavily into equity and aim for higher returns. You can even take higher risk with mid cap and multi-cap funds. It is clear that saving in debt instruments will not serve your purpose, but how much risk you will take will depend on your risk appetite. Remember, that as you move towards retirement, move your investments to debt oriented instruments to protect it from market volatility.
If you have a house, make use of it. If the house is in the city area, one option is to sell it and move to a smaller house on the outskirts. This will free up some funds that you can use for retirement. So if you are staying in a 3-BHK house, you can even consider moving to a one-bedroom-hall-kitchen house, if your kids have moved out. You can also go for reverse mortgage loans where the bank pays you a regular amount till a certain age or till you are alive. The house will be taken over by the bank or lender and you cannot leave it for your kids, but when the situation calls for it, this is one option to be considered.
So, if you have not started saving for retirement yet, do not fret. You can still retire comfortably.