This article, as the name suggests is for those who start their retirement planning in the pre-retirement phase, in their 50's. Since forever, financial planners, bloggers, investment forums, distributors, including us, have been propagating the importance of early retirement planning, yet the ideal has not been implemented by a vast majority of Indians. Now when the deadline is just around the corner, the idea of planning for retirement makes a sudden entry into the 50's investor mind. The investor is late and Retirement Planning at this stage is a challenging task indeed, because firstly there is time crunch and secondly this is the time when you are converging towards the fulfillment of some of your life goals, you have grown up kids who might not be settled yet, kids' weddings expenses, etc., are yet to be funded and at the same time you have to plan and provide for your retirement. So, no doubt it is back-breaking but every cloud has a silver lining.

The following paragraphs will acquaint you with how an investor in his 50's should go about his retirement planning. You must note that planning the last 10 years will not land you in a similar position as you would have landed, if started one or two decades earlier, but yes with your efforts and commitment you can still be in a better plight in securing a comfortable retirement.

Assess your requirement, The first step in planning for your retirement is determining the amount you are going to need. This amount should be able help you maintain your present lifestyle post your retirement. It should be as specific as possible, and should be arrived at, after considering a number of factors such as, impact of Inflation, if your monthly expenses are Rs 40,000 presently and you are 55 years old, assuming an inflation rate of 6%, your monthly expenses will be around Rs 53,000 when you turn 60, they'll go up to Rs 96,000 when you turn 70. So your retirement fund should be able to provide for your ever increasing expenses. Secondly, you must also consider Longevity, the average life expectancy of people has increased over the years, you might live another 30 or even 40 years. So your retirement fund should be adequate to last a very long period of time.

No flukes, no trial and errors, The time is such that you don't have much time on your hand, to try your luck. The plan should be fool proof as there is no scope for mistakes. A small error can cost you big because you do not have much time to recover from a loss. Hence, as a first step you must approach a good financial advisor, who can rightly assess your needs, the time constraint and helps you devise a safe and goof-proof financial plan.

Save more, You are doing a 30 year job in 10 years, so you need to run really fast in order to cover up. The only way to achieve your goal is through saving extra. 50's is the peak earning period for most people since they must have reached senior management positions or have established businesses, with some major life goals already achieved like a house, kids educations, kids marriages also in some cases. So you must be having or moving towards a stage with increased disposable income, this income should be saved and invested for your retirement goal. Track what you are spending on, try to cut unnecessary expenses because either you splurge now or survive later.

Create a second source of Income, To save more you have two options, one you can create a second source of income from your existing assets or you have to settle for a lower standard of living. You can explore a number of extra income options from within your existing asset base. For example, you have a two storey house, you can let out a floor on rent or can start a PG, and direct the extra income towards your retirement. Or you have a colossal bungalow, where you and your spouse are living, your kids have moved out, your parents are no more, so you can sell it or rent it out and move into a smaller space, thus saving a lot of maintenance expense every month, and it'll be a huge contribution towards your retirement goal. A peaceful Retirement should be the priority, any asset which isn't aligned to a goal, use it to strengthen your retirement kitty.

Low Risk not No Risk, The general principle is you should invest in risky long term investments and move towards safer investment options as you age. Follow the ideology but not stringently. If you invest your entire saving in low risk, low return investments, then your pace towards your target is like a drop in the bucket, you might never be able to reach your destination. Your retirement plan should be a combination of a 50 year old and a 30 year old. You need some exposure to equity since it will generate higher returns. The idea behind including equity is, although you are retiring within this decade but that is just the beginning of your retirement period, you won't be spending your entire retirement corpus on Day 1 of your retirement. You can invest some amount in equity to sponsor your middle retirement years, like your 70's.

Be debt free as soon as possible: If you have any Home Loan EMI's or any other EMI's running, try to get rid off them as soon as you can. Unassociate yourself from the high interest bearing credit cards. Offload the burden from your shoulders so that you can have more money at your disposal to save for your retirement goal.

Start working on your health, healthy people save more more because of lesser trips to doctors and lesser expense on medicines. You are entering a stage when you'll be increasingly vulnerable to health problems, having your health by your side simply translates into having more money in your bank account. Also, Review your health cover, if you are a part of the family cover, take a separate and higher cover for yourself and your spouse. Any unexpected medical emergency can wreck your dream of living a comfortable life after retirement.

To conclude, Plan Now and Plan carefully if you want to avoid working till your last breath!

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One of the most integral part of personal finance management and financial planning is estate planning. It is something very important to know and hence we would like you to read it to the end.

What is Estate Planning?

Estate is everything that one owns viz. assets & owes viz. liabilities and responsibilities. Please do not confuse it with Real Estate and in this context, it is a completely different thing. Estate Planning is a process of arranging and planning a person’s succession and financial affairs. An Estate Plan incorporates a person’s wishes about his estate - this could be regarding his estate management, preservation, distribution and his estate legacy post life. The main thing though remains as to how your estate will devolve upon your loved ones post your demise.

Estate Planning is for whom?

There is never a right age or any particular level of financial wealth required to engage in estate planning. It is for all ages and for every person to wishes to ensure a smothe transfer of assets due to his/her incapacitation or demise. Thus, it is irrespective of age and portfolio size, for everyone including you and me.

Think of it as the other side of buying a life /term insurance. Why did we buy the life policy? An estate planning also has similar justification, similar logical reasoning.

Do you really need it?

Most of us as individuals place a lot of importance is wealth creation. However, we often neglet the need to ensure preservation and succession of wealth. That is often left to destiny and that should never be the case. In the last few decades, our societal fabric and landscape has gone huge change. We now see more nuclear families, less of huge joint families, more financial awareness and need for personal financial security. In such scenario, it is not difficult to visualise disputes and legal issues which can be a challenge for entire families. Proper estate planning will be an answer to this issue.

On the other hand, most of us also believe that nomination and joint ownership is a way of estate planning. You will be surprised to know that both, nomination and joint ownership of assets is ineffective and legally disputable. The succession laws of the land supercedes everything and at the end of the day, assets will have to be distributed as per laws and not as per nomination or joint ownership. They will be merely treated as recipients and custodians of assets on behalf of the legal heirs till transfer.

Methods of Estate Planning:

One can plan his estate in two ways (a) by writing a Will or (b) by creating a Trust.

A Trust involves transferring of one’s estate to a Trustee for the benefit of certain beneficiaries which may include the person creating the Trust who is called as the Settlor. A Trust provides for management of the estate during one’s lifetime and also provides for distribution and management of one’s wealth post demise in a planned manner over a period of time.

A Will is the simplest and the most traditional way of distribution of assets by a person. A Will is legal declaration of the intention by the one making it – the testator – with respect to property that he/she desires to be carried into effect after his death. A Will is likely to be more relevant and of interest for most of us.

Advantages of Estate Planning

1. Get property and assets to loved ones quickly: After the death of an individual, the legal formalities and transfers take time and the family generally has to wait a long time to get everything in order. With proper estate planning and a latest will in place, you can avoid this delay for your family and they can get everything in order quickly. This becomes even more important if you are the bread earner of the family. Your dependents in most cases are not even aware of your entire estate and also the various investments that you must have made. A detailed will helps them getting all the affairs in order.

2. Minimize expenses: A lot of money needs to be spent in lawyers' fees and legal expenses in case of absence of an estate plan. An even higher amount of money is spent in case there are family disputes. One can avoid this hassle by simply creating a will and ensuring that a proper estate plan is in place.

3. Reduce Tax burden: When a property is transferred without a will or through a court case, one has to pay capital gain tax. This tax is avoided when one inherits or receives the property via a will. Similarly, estate planning can help you avoid a lot of taxes. One example can be making a trust. If a trust is set in place in a proper manner, you and your family can avoid paying taxes.

4. Plan for incapacity: While most people are convinced that estate planning is for old age, that is not true. Life is unpredictable and anything can happen at anytime. It is possible that one becomes incapacitated because of some unfortunate accident or sudden medical condition which leaves them unable to manage their financial affairs. In estate planning, one can ensure for both financial and healthcare decisions in case of incapacity. This can help you and your family in difficult times.

5. Support your favourite cause: An individual can leave a fixed amount as donation or as charity to a cause he or she wishes. In often cases, where a proper will has not been made, these causes go unnoticed as the family is unaware of the deceased wishes.

6. Assign a legal guardian for your children: In unfortunate cases where both the parent pass away and the children are still minors, the court decides who the legal guardian to the kids will be. However, with estate planning, you can assign a legal guardian in case of any unfortunate incidents and make sure that your kids go into safe and kind hands.

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We have all struggled to stay in budget. Each time we get our salaries or income from the business, we vow to save more money and reduce expenses on unnecessary items but end up pushing the agenda for the next month.

It is important to have some sort of control over your spending and being able to save some money for not just emergencies but also for the future. Any individual should save some, to make their future better, to be able to build assets and afford things which currently seem unaffordable. It is important that you understand the opportunity cost of spending money. Like, could the money you spent on the luxury watch be better used for your sons' education fund? Or could the expensive phone that you juts upgraded be avoided in order to save up for a better house?

While certain expenses like rent, loan EMIs, education and basic amenities are necessary and unavoidable, one can definitely control their discretionary expenses. Here are a tips which can help you to control your discretionary spending:

1. Monitor your expenses

You cannot change or control something if you don't know where you are going wrong. In order to spend less, you need to understand and realise where you have been spending more than what is needed or where you have been spending is unnecessary and avoidable.

So, note down as many expenses you can remember for the past few months and look at the areas where you have spent your money. You can divide them into groups, like basic utilities, travel, shopping, luxury items etc. Expenses on items like house rent, electricity bill, phone bill, groceries form a part of basic utilities and of course cannot be avoided but they should be kept in check. You should know how much you are spending. This will help you in realising how much of your spending is necessary and basic and how much is discretionary. Further, once you realise what your discretionary expenses are and where are these expenses mostly meant towards, you can control it.

For example, if you have been spending a lot on eating out and you realise this after monitoring and judging your expenses, you can be careful about it. Of course, you cannot and should not completely cut eating out, both change and socialising is necessary, however, you can control when you have been too lazy or too bored eat to at home.

Also, if you observe that you have been spending a lot on shopping for things you don't need, it maybe wise to go on a shopping hiatus for a while. Thus, monitoring your expenses will help you control them as well.

2. Make a budget

Making a budget is the very basic step to control your expenses. It is simple and effective. Once you make a proper budget, you will know how much you spend on a particular arena and thus it will be easier for you to control your expenses.

While, you may say that making a budget will not actually make you stay in one, whether you stay in it or not, you will still save more than general. This is because once you make a budget, you make a mental note on how much to spend on what. Now, while you are crossing that mental limit, you will realise that you are going over limit and thus will not be as reckless as you would have been without that reminder. Thus, even if you don't stay within the budget, you will at least benefit by spending lesser than general, which is the whole point of making the budget.

One point to remember while making the budget is to be realistic about it. You cannot expect to cut down your expenses by 40-50% in the very beginning. In fact, spending 40-50% less is very difficult even if you learn to spend less. Make sure that the budget you are making not just covers your basic needs but also gives you a little margin to spend on unforeseen expenses and also that it doesn't cut you out from everything but just helps you save some extra amount.

3. Cut yourself at the source

If you are someone for whom saving is extremely difficult, you can set automatic transfers which will leave you with lesser money. For example, you can get a different account and set up an automatic transfer at the beginning of the month. So every month a specific amount is automatically deducted from your account and saved in another account. If you want to be very stern with yourself, make withdrawal from the account difficult. Don't get a debit card for it or ask your family member to change the pin and not tell you.

Similarly, you can also start an SIP to a liquid fund or other instruments, which will help you save and invest more.

While there are many more ways you can save, these three simple step should cover you in a basic and extensive manner.