How can a woman plan towards building an adequate retirement corpus to create a pension safety net.

How and why should a woman secure her post-retirement life?

It is a fact that women have a longer life span than men. It is, therefore, ironic that women tend to rely on men when it comes to retirement planning. If you too, have subconsciously passed on the financial planning buck to your husband/partner, or plan to do so, this article concerns you. Not only is it important for every woman to spare some time and think about their financial future but it is also important to know the ways to create your pension safety net.

1. The right time to start

Identifying the right time to start your retirement planning is very important. However, it is quite simple too, because NOW is the right time to start. Remember, it’s never too early to start saving because even a little saving can mature into a large amount if there is a prolonged duration in between. And it’s also never too late to start investing. 

2. Set a target to chase

You should have an end in sight before starting to plan the finances. Try to estimate your monthly requirement in your retired life. Envisage your needs and consult someone to advise you on the future value of money and figuring out inflation-adjusted values of income and expenses. Once you identify your monthly requirement, you can set a saving target which can generate the required monthly cash inflow in your post-retirement life. You can also use the Retirement Planning Calculator to help you determine the amount you need to save in order to lead a comfortable retired life. Get calculating today!

3. Be ambitious with your goal

While it is important and wise to consider the risk involved in investments, it is also worthwhile to take calculated risks. Higher the risk, higher is the reward, so you can maximise your yield only if you increase your risk appetite. With astute financial planning guidance, you can invest in the more volatile alternatives wisely and earn more – instead of putting your entire fund in fixed deposits and gold.

4. Save aggressively

Being a woman, you may have a shorter work span compared to your male counterpart. This is often due to reasons like maternity and career breaks that many women take to concentrate on the upbringing of their children. Putting an ECS mandate on your investment helps you to make sure that savings are done regularly. 

5. Cover health worries

Select a good health insurance plan, particularly one that addresses female health concerns. This will make sure that all your years of savings is not liquidated in a flash if you undergo an expensive medical intervention. Pay attention to the overall cover considering the inflation rate. 

6. Get well compensated

Don’t consider your job as a means to keep yourself busy or hesitate from asking for your just dues. You shouldn’t settle for anything less than what is the fair estimation of your pay package. Working hard, getting good appraisals and achieving performance ratings that demand a good raise is the natural work cycle that you should follow.

Importance and need of creating a pension safety net

Women generally earn lower than men. It was observed in a recent study that women earn 19% less than men in India (Men’s Rs. 242 per hour to women’s Rs. 196 per hour). As mentioned above, women may end up working for fewer years in their lifetime due to maternity and household and parental commitments. These facts indicate that women are likely to end up with a smaller retirement corpus, which is why they should save more zealously – whether they are working women or homemakers. We have charted out eight retirement investment options for women to ensure a happy retired life.

How I did it

Rahila Khan

I am a single mother of one. I lost my husband just 5 years into my marriage. Life has been a struggle for me, but I have managed it and today I have no complaints. 

I was a young widow with a 3 year old son when my husband passed away due to a heart attack. My parents were my rock… Read more

Piya Sharma
Chartered Accountant

I am a CA by profession. As my training has taught me, investing is a big part of my financial strategy. I am slightly risk-averse and invest heavily in mutual funds, FDs and ULIPs. I stay away from the stock market. 

As the household expenses are taken care of by my husband, I use most… Read more

Rajesh Singh
Corporate Executive

Growing up I did not have much other than the bare necessities. Though my mom tried her best, she could not fulfil our wishes. I always knew I had to study and improve my life. Today, I own a bike, a car and my own humble house. This has only been possible because of my prudent wife.

We… Read more

Suraj Chandwani
Gas Station Owner

I like to work hard and live a good life. I want to give the best to my wife and son, as well as my parents who live with us. I own a gas station in the suburbs of Mumbai. I had taken a loan to set up my business. So a major chunk of my earnings goes in repaying the loan. I also have a car loan… Read more