Savings

Investment planning for retirement: as with any savings, setting the investment plan after retirement should be done as soon as possible

A few weeks ago, when I was googling pension systems in other countries, I saw this headline: 100-year-old Brazilian breaks record after 84 years with same company. Brazilian Walter Orthmann joined a company called Industrias Renaux on January 17, 1938 and 84 years later he is still working there. I guess the biggest achievement here is that at the age of 100 he is still active and alert and still enjoys working. In the article I read, here is his advice: “I don’t plan much and I don’t care much about tomorrow. All I care about is that tomorrow is another day I wake up, get up, exercise, and go to work; you have to deal with the present, not the past or the future. Here and now is what matters.

There’s plenty of news about this man that you can google and find out more about, but it goes without saying that this kind of “retirement solution” isn’t intended for the salaried among us. Retirement is a scary thing. By the time employees reach this age, they have generally worked for almost 40 years. For most of them, their existence is pretty much defined by the routine of their work. More importantly, their finances are set by getting that salary every month.

Except for a small fraction of people who are fortunate enough to have an inflation-protected income – for example, rent or a government pension, or those who have generated enormous wealth during their working years – the specter of financial problems and impoverishment after retirement haunts most retirees. Lifespans are long these days and most people have two or three decades to live in retirement. During these long years, many things can happen. For example, even though the lifespan has become long, the increase in chronic diseases has meant that the “lifespan” has become short and many of us will have to deal with ruinous medical bills at some point in time. the last part of our life.

This fear of the unknown – the specter of risk that comes with retirement – ​​makes it a natural instinct to be careful with post-retirement investments. This is perfectly understandable. Once you stop earning, there is no plan B. If you make big losses in your investments, that money is gone forever. You will not be able to earn more and compensate for losses. This makes people extremely conservative in their outlook. A considerable number will only trust bank deposits, sovereign regimes and maybe.

It seems safe, but in reality it is not. The problem is that your savings can face a sudden and brutal disaster, or it can face a long and gradual disaster. Like the proverbial frog in boiling water, the latter cannot be felt. Those facing this long, slow disaster didn’t even know there was an alternative.

In fact, I have come to realize that some people choose this disaster knowingly. Why is that? I spent years explaining that after retirement, equity is essential to avoid this slow catastrophe. There are those who understand this very well and yet are so afraid of quick disaster that they willfully choose it. It’s the worst of all worlds, and it stems entirely from a lack of confidence. This trust is difficult to earn, and the only way to achieve it is through knowledge and experience, combined with concrete examples. That’s the role I try to play in this post, along with resources you can find online, including a very comprehensive set at Value Research Online. However, I must point out that like all savings, fixing your investment plan after retirement is something that needs to be done as soon as possible. It may be a slow disaster, but the years pass quickly and it doesn’t take long for the slow to arrive.

(The author is CEO, VALUE RESEARCH)