The biggest question in retirement planning is “does your spouse know what is your retirement plan”?

State Bank of India used to conduct (I have no clue whether they still do) retirement planning sessions for their higher levels of management. The people who were 2 years away from retirement were allowed to attend this program. One good thing about this program was that the wives were also asked to participate in the same. So the assumption was that at least she knew something about the retirement plan.

However, in most other cases, the wife does not know what is in the mind of the husband when he bought various shares, mutual funds, etc. and on his death, suddenly the wife asks “what is this”.

Sad? not sure, but true for sure.

The most important question that a 29 year old can ask his 27 year old wife is “how will we learn to manage our money for 45 years without both of us putting in any effort to earn money”. Honestly, this is the MOST IMPORTANT QUESTION. Will you be able to manage 45 years of your life (from age 55 to age 100) without any ‘earned’ income.

The next important thing is “how will the 2 of us work in such a way that we have enough corpus for SUCH A LONG period in time”.

Most people I know live on denial or think that they will live like their parents did. Many of them don’t even know that their parents were protected by a solid equity portfolio (I know one daughter who has zero equity while her father had a full equity portfolio). Huge denials. Frankly I do not think that a person earning a modest salary can retire without learning how to invest. Do not look at your parents – if they were born in the 30s, 40s, or 50s. Their lifestyle may have been different, they maybe having pensions, they may have had an “Ipo bought portfolio of blue chips” – none of these shortcuts are available to you.

You need to answer some simple questions. How long will you and your spouse work to create a corpus big enough to last 45 years of non working. No, it is not an easy question to answer, but you MUST answer this question. TODAY.

Most people I know – some friends, some cousins, some clients, some ex-clients – can all live for 4-5 years in retirement. No problems at all. The question I am asking is “will you be able to live for 45 years without any earned income, paying too much for money management, providing for inflation, and keeping it simple”. Not too many, I can assure you.

An adviser may not know how to ask these questions.

An adviser may pitch dramatically high or miserably low figures – to please you. Hey, you are in trouble both ways.

An adviser should be conservative. It is easy to handle a 84 year old saying “I wish I had spent more” rather than a client who at 79 says “now my money is over…what can I do”.

Identifying and agreeing with your spouse about your retirement plan – is the GOLDEN FIRST STEP in retirement. How will you put together the huge corpus, and how both of you will learn to manage your money in that period are the second and third steps.

Retirement strategy statement comes much after that.