Financial Peace During the Silver Years

Organising our assets and having an income-expenditure plan are the keys to financial peace

Peaceful life during the silver years needs a thorough recasting of our life styles. Having done the hard work of our prime life well; peace should be the next motto. Putting your physical house in order is only partly complete by having a good house with supporting facilities or by checking into a senior living facility. We need to plan and implement many more things to lead a happy life. Our confidence that ‘I know what is the best for me’ may turn out to be sub-optimal, as life would twist and turn in unexpected ways.

Have an informed Financial plan

A major part of stress-free life depends on achieving financial peace. Financial peace, however, does not mean be happy with the accumulated wealth and closing our minds to material issues. But far from it. Rational financial/wealth/asset planning needs reasonable level of financial awareness and high level of alertness. We need to be aware of the various investment options available, and each one’s pros and cons, even though we may not invest in many of them. Like real

estate, gold [physical and digital], insurance, various securities, mutual funds, alternative investment instruments [real estate investment trusts, infrastructure investment trusts], exotic products like crypto assets, art works and non-fungible tokens etc.

Do not fall for ‘high returns’, digital arrests and other scams

We need to understand the entities providing those products and services. While several products and entities are regulated, there are many who operate in the shadows promising glittering gold and multiplying returns overnight. Aged people with incomes are easy targets for the shadow operators. ‘Digital arrests and other scams being reported are just a tip of the iceberg, as scamsters invent new ways to defraud people and are always ahead of the regulators and law enforcers. Our defense against frauds and scams must be strong, built upon proper awareness. We should deal with only regulated entities and products.

Quite often we take decisions based on others advice, since our own knowledge of the complex world of finance is very limited. There are so many experts to advise us. Remember, all of them are the well-wishers of the well-to-do. We need to know a lot even before interacting with them. As a first step we need to know whether they are qualified and authorized advisers? All financial sector regulators [RBI, SEBI, IRDA etc.] publish the list of such entities. Next, scrutinise their advice, even if they are authorized, regulated entities since mis-selling financial products is very common.

Compare products, providers and our risk profile

Many advisers/customer care officials take advantage of their clients’ information gap and push specific products where they or their company make the maximum profit. Remember, there are only a few, time-tested financial products that suit the risk-taking ability of senior people. Such as fixed deposits, health insurance and mutual funds if one is still active. Here too, there are qualitative differences between players and products and a good understanding of those issues is needed. For example, we should open account with well-capitalised, well-governed banks with long track record. And book FD of such duration as per our financial plan.

Plan early and keep our lives simple

Taking stock, discharging liabilities, keeping only what is needed, completing legal documentations, systematising our income stream and spending pattern are major tasks to be accomplished for lasting financial peace. Accept the fact that our capabilities, both physical and mental, decline as we age. Since our mind should be alert enough to understand many nuances when we plan our future, we should have such plan ready at the earliest.

Three Wills

In short, in order to keep the last phase of our life easy and simple, we need to have three Wills: 1). on property/assets; 2). on end of care [Living Will] and, 3). will to live well. Together, they provide us reasonable peace of body and mind