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NEW DELHI: A basic financial plan includes sources of money and provisioning for expenses. As you advance into financial planning, expenses are prioritised to optimise savings. Many people think that financial planning is only for working individuals or younger ones. But it is as crucial for retirees.

Santosh Joseph, founder and managing partner, Germinate Investor Solutions LLP, said, "Whether you are working or retired, the rules of the game don't change. We have to ensure that our money is optimised, i.e. our expenses and income must be well balanced. Even though one may not have an income and have not saved enough money for retirement, they need to understand how to efficiently save and invest that money to fund their income during retirement. Secondly, whether you are salaried or retired, the inflation or the devaluation of the rupee is a real phenomenon. Your value of money is at stake. Therefore, keep in mind that irrespective of whether you are young, old, working or not working, the inflationary effect is common for all of us."

But once you retire, potential sources of income dwindle. Therefore, it is better to plan well and ensure that you don't compromise on your standard of living and are able to absorb the increase in living costs.

"Most retired people are worried because they feel insecure that they don't have an external income…When you know how much money you need and have a built-in enough safety margin, you can live extremely stress-free or tension-free during retirement. Secondly, when you know how much corpus you have, what yield the corpus is giving and how much money you need, you can be a little more relaxed or a little more generous with your month-on-month expenses as far as your retirement expenses are concerned," Joseph said.

With a retirement corpus, one can plan for vacations, take up philanthropy, among others. Moreover, if you invest your savings well even after retirement, creating the right kind and right type of assets ensures your own safety and security. Also, it leaves behind a good legacy for generations to come.

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