A viewer on YouTube asks, “I am 45 years old. After watching many videos regarding MFund, I thought of asking you about my investment plan. 50k is my monthly salary. I am in a rented house only. Can you suggest an investment plan for my retirement in my own home?”
At 45, retirement should be your number one priority. It would be best if you ideally were more emotionally attached to retirement planning than owning a home. I have the following recommendations.
While planning for retirement, you should aim to work beyond your scheduled retirement. So start thinking about how to convert your experience and skills into income.
Work on increasing your current income. That will be a game-changer in achieving your dreams. I know it is easier said than done, but try it; you must. So be it if this means less relaxation every day and at the weekends. Big sacrifices are necessary to change your social situation.
If you take a home loan to buy property, Unless you have significant assets, I am reasonably certain that you will not be able to invest enough for retirement because of the EMI outgo.
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Therefore, as difficult as it may be to read this, we suggest not thinking about purchasing property now. Many retirees today are asset-rich but cash-poor. That is, they have a place they can call home but do not have enough money to be financially independent in retirement.
Therfore, focus on investing for retirement. Naturally, rent will become an essential expense in retirement if you do not own a home by then. Relatively, this is a smaller problem than ending up with a lower corpus than necessary to fight inflation in necessary expenses.
This is why you must focus on improving your current income, delay retirement as much as possible, and find ways to continue working even after ‘retirement’. Again, all these are easier said than done, but this is the grim reality.
Maybe, just maybe, if things go your way, at the time of retirement, depending on your family circumstances and financial situation, you will have three choices: (1) Continue to stay in rent (yes, I know, far from ideal, but it is a choice), (2) Buy your property in a less expensive city (or your home town) or (3) Buy a retirement villa (which is typically more affordable). Again, this depends on how much corpus you end up with.
My overall suggestion is not to worry about buying a home for now. Continue to stay in rent. Focus on improving your income. Start planning to work beyond your scheduled retirement age. Focus on your health and do your best to enjoy the present.
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