If your investment income is enough to take you through the rest of your life after you stop working, it means you have achieved financial freedom.
It is important to review your retirement plan along the way. Do you have a big enough retirement corpus to sustain your family or are there any changes in your lifestyle that require adjustments?
You also need to see which city you are retiring in. For example, now I am sure I will be retiring in Mumbai. In the initial days of my career, I had thought of Delhi. So, you need to make adjustments to your financial plan accordingly.
Then you may need to take care of other things. So, I have a home loan, which I am on track to foreclose before retirement.
Then external factors will also have an impact. For example, the rupee depreciation has impacted my retirement kitty for post-retirement travel. So, I will have to increase investments to ensure that I have enough in my travel kitty by the time of retirement.
I like wildlife. So, some of my travel plans are linked to that. I want to do the Kruger National Park in South Africa, and whale watching in New Zealand. I have already been to Masai Mara, Kenya.
I have been to Rome, but it’s such a historical city where you can still see and feel its history, that I want to spend a month there. I also want to do the Arctic Cruise.
And, of course, given my love for music, I also end up collecting vinyl records (LP) on my travels where I can.
Financial planning tips
For different individuals, financial freedom means different things. So, it is important to identify your basic goals (healthcare, retirement, children’s education). Most of my basic goals are well on track.
With healthcare, I have decided to increase the kitty for my family post-COVID. I want to ensure that there is enough buffer.
After basic goals are taken care of, you can look at your lifestyle goals. For example, music is very important to me. So, I wanted to set up a certain kind of music system at home, which I have now managed to do. For this, I had started a seven-year systematic investment plan (SIP).
But, it is important to have realistic and achievable goals, which are not in excess of your earnings.
I maintain a 70:30 equity:debt portfolio and review it annually. And I diligently re-balance the portfolio if the allocations have shifted from the original split. This has helped me come significantly closer to my goals.As told to Jash Kriplani