When Wife is the Lone Survivor

Worldwide, older women end up living in financial stress a lot more than older men. In US, women comprise three-fourth of seniors who are considered poor. There is no official data for India. But, since life expectancy of women is more than men, one can easily correlate with US data.

It has been proven that women have higher life expectancy than men. This means that while planning for retirement, women will have to plan for a longer period. In case a woman is fully dependent on her husband and is not financially aware, she can get into trouble after the husband passes away. So, whether a woman is planning her retirement alone, or with her husband, the number of years post retirement is an important aspect of retirement planning.

 

 

It is common to see women give up their careers or take up lesser-paying jobs to take care of the children, maintain work life balance etc. The percentage of women doing this is high in India when compared to western countries. This means women will have to save more in a short period to fulfill their needs. So, they should start planning for retirement and stick to a plan right from the beginning of their careers. That is the time when there are limited responsibilities and so can save sizeable amounts.

In all families, Rich or Poor, Urban or Rural, women tend to avoid taking financial & investment decisions. Not only women generally earn less, but they also work for fewer years because they usually take time off for child care. On an average, they spend about seven years away from work, which means they are not saving anything during this period.

The lack of financial awareness among women makes them financially vulnerable while their Husbands are no more. They will either get too defensive about investment or will leave too many decisions for outsiders. Both the approaches have their drawbacks.

What do you need to do to avoid a Situation like this?

• Make women of the home party to all financial decisions
• Ensure that all assets are jointly held
• No Loans shall remain outstanding for which the spouse has to repay.
• A WILL, and a financial emergency kit (list of important documents, contact details, procedures etc.,) should be in the know of your spouse.

Apart from keeping in mind these moot points, Every couple should discuss the contingency plan with their advisor. The continuity of cash flows, just in case one of the spouses were to go, is perhaps the most important aspect of retirement planning. At SAKSHAM WEALTH, we are always available to discuss the finer nuances of your financial planning.

 

Sameer Rastogi,

+91-9891198999

SAKSHAM WEALTH Solutions Pvt. Ltd.

Article published in Wealthy & Wise  Magazine ( June 2018 Issue)

To read more articles  http://sakshamgroup.com/new/wealthy-wise/

 

Education inflation is the real deal, start planning for it

 

We constantly keep close eyes on soaring prices of groceries, petrol & consumer inflation rates but there is another kind of inflation that has a much sharper impact on savings & go mostly unnoticed which is “Education Inflation”.

Inflation is growing at more than 10 percent every year in the education sector. It is extremely important that you plan well for your children’s higher education.

Inflation is growing at more than 10 percent every year in the education sector. It is extremely important that you plan well for your children’s higher education.

For example,

– The fees in IIT for Rs. 50000 per year in 2008. It increased to Rs. 90,000 in 2013. Currently it more than Rs. 2,00,000.

– IIM-A increased the fees from Rs. 18.5 lakh in 2017 to Rs. 19.5 lakh in 2018.

The National Sample Survey’s Office (NSSO) showed that 70 percent of students and their parents preferred private institutions to government-based ones. The gross enrolment ratio (GER) is a metric that expresses total enrolment in terms of percentage in educational institutions; it is calculated for the age group, 18-23. The GER for higher education in India is close to 26 percent; it is 44 percent in China and 86 percent in USA.

The college quantity scenario is widely out of proportion in India. There are only 6 colleges in Bihar per lakh students while small UT like Puducherry has 60 colleges/ lakhs of student. The all-India average is 25 colleges per lakh students. Secondary education Schools in India may have grown exponentially, but the higher education sector has failed to keep up the pace with it. Which has created a large gap in India’s higher education sector.

For instance, over 130 plus new IB high schools alone should have been added in the last decade to get the student/college ratio right. That figure is only for business schools, what about shortage of Engineering colleges, Medical or a basic graduation colleges. Out of the existing ones, how many good colleges can you think of? I will bet you can count them on your fingertips.

In the past 15 years, one of the biggest shifts that have occurred in peoples’ financial goals is the craze to send their kids abroad for higher education. It has been triggered, in recent years, by a number of factors: more international exposure, severe domestic competition for premium Universities.

Today, students from different countries travel across the world to other countries to pursue their higher studies. Making a career abroad not only helps them to improve their educational experiences but also takes their career to new heights.

When it comes to study abroad it seems a costly affair for parents to finance their children’s higher education. These could be tuition fees, travelling expenses, hostel accommodation, book materials fees, health issues and much more.

Cost is important. Given our country’s relative inflation, interest rates and current account balance, it is unlikely that the Indian rupee will strengthen to a level that the exchange rate (against the US dollar and the pound) becomes favorable for us, at least in the foreseeable future. Overseas education is going to remain expensive for rupee owners and earners for some time to come.

Some parents mostly invest in land or property, hoping to sell when a need arises. However, these immovable assets at the time of need might not fetch the amount of money one hopes for. It is risky to depend solely on this mode of investment alone.

As with any savings goal, it’s best to start investing early. First, set your goal: Figure out how much you may need to save for each child based on his/her age

One must evaluate children’s future needs, and then start working on them. Begin the process of saving and investing early. This enables to create adequate resources for the fulfillment of kids desires and ambitions.

Sameer Rastogi,

+91-9891198999

SAKSHAM WEALTH Solutions Pvt. Ltd.

Article published in Wealthy & Wise (April 2018 Issue)

To read more articles  http://sakshamgroup.com/new/wealthy-wise/