Are you a DOUBLE INCOME COUPLE, did not have a kid and getting on in years?

There is a serious worry for couples without children. The list (may not be in order) would be somewhat like this:

a. who will look after us when we are older

b. what happens to all our money, and

c. what happens to the house in which we live

d. God forbid if we were to run out of money what happens?

e. If one of us dies and the other spouse is unable to even COMMUNICATE this to the outside world, what happens?

f. Who will support us mentally and physically when we need them in our old age?

g. Did we make a mistake in not adopting a kid?

It is really difficult for me to enumerate all the questions, but some of these are serious ones. So they get some nephew / niece to help them. The worry here is  the senior citizens do not want to pay for these services, and the younger people think that they will anyway inherit all that is visible. Some of the younger people cheat, and thus compensate themselves – and they justify by saying ‘what will the old man do with the money….he does not even have kids’….life is tough is it not?

See around you and find out who are the hangers on. Many of them will sound very sweet, but could have ulterior motives.

More importantly how should you look after your portfolio as you age along. This is only a broad indicator – for each of us the exact ages could be a little different from what is mentioned here.

Age 55 (retirement) to age 65: you will be reasonably active, and will be able to take care of your financial requirements. You will know and remember your portfolio and will be able to ‘actively’ manage it. You should be invested in direct equities, mutual funds, government bonds (nsc, kvp), ppf and senior citizen account in the post office. You may have to go to the post office regularly to collect your interest, etc. but physically it should not be a problem.

Age 65-70: You would have by now settled well into a ‘retired’ routine, seen the world, finished most of your ‘desired’ travel, and be willing to get into a more relaxed world. At this stage your single biggest aim should be to SIMPLIFY your portfolio. This means getting out of direct equities and putting all that money in mutual funds – equity, balanced and debt schemes. If you have a very big corpus this is a great time to be buying an annuity from LIC. It is a sub-optimal investment, but is very easy to operate and you will get your cheque / direct credit on the 5th of every month without any effort.

70-75: Now is the time when you should have your annuity and the only other investment that you must have is a simple bank fixed deposit. Keep it in 4-5 banks so that there is no tax deducted at source. Along with your annuity this is your source of income. Get rid of all the assets other than this. No second house, sell most of the jewelry, and convert everything to cash. Make sure your spouse knows that she is a nominee, make sure she goes to the bank once in a while. If you are short of money, consider a Reverse Mortgage. Or even better sell your city house and shift to a old age home where you can spend the rest of your life.

above 75: You are very likely to need assisted living – changing of bulb, cleaning the curtains, Diwali cleaning, why even getting vegetables! If you are not sure about remembering your atm pin number, withdraw money with a cheque and from the branch. Spend lavishly on auto, taxi, etc. – it will ensure that you do not drop a bag or some other valuable item on the road. Searching, memory, etc become quite an issue so be aware of such worries.

I know of nephews and nieces cheating their uncles and aunts, do not let it happen. If you do not do a reverse mortgage you could sign off the house to your caretaker. ….