Like all savings, determining a post-retirement investment plan should be done sooner rather than later

A few weeks ago, while googling retirement systems in other countries, I saw this headline: 100-year-old Brazilian breaks record after 84 years at same company. Brazilian Walter Ortmann joined a company called Industrias Renaux on January 17, 1938, and 84 years later is still working there. I guess the biggest achievement here is that at 100 years old he is still active and awake and still loves to work. In the article I read, here is the advice he gives: “I don’t plan much, nor do I care much about tomorrow. All I care about is that tomorrow will be another day where I wake up, get up, exercise and go to work; you must deal with the present, not the past or the future. Here and now is what matters.”

There are many news stories about this guy that you can google and find out more about, but of course this kind of “retirement solution” is not available to the salary earners among us. Retirement is a scary thing. By the time wage earners reach this age, they have typically worked for nearly 40 years. For most of them, their existence is largely defined by the routine of their work. More importantly, their finances are determined by receiving that salary every month.

Except for a minority of people who are lucky enough to have an inflation-protected income – such as rent or a state pension, or those who have generated enormous wealth during working years – the specter of post-retirement financial problems and impoverishment haunts most retirees . Life expectancy is long these days, and most people have two or three decades left to live after retirement. A lot can happen in those long years. For example, although life expectancy has become long, the rise of chronic diseases means that the “span of health” has become short, and many of us will face devastating medical bills at some point in the latter part of our lives.

This fear of the unknown — the specter of risk that comes with retirement — makes it a natural instinct to be conservative with your post-retirement investments. This is completely understandable. Once you stop earning, there is no plan B. If you make big losses in your investments, then that money is gone forever. You will not be able to earn more and make up losses. This makes people extremely conservative in their views. A significant number will only trust bank deposits, government schemes and perhaps .

This seems safe, but it really isn’t. The problem is that your savings can face a sudden, severe crash, or they can face a long, gradual crash. Like the proverbial frog in boiling water, the latter is not felt. Those facing this long, slow disaster don’t even know there was an alternative.

In fact, I realized that some people choose this disaster consciously. Why so? I’ve spent years explaining that post-retirement equity is a must to avoid this slow crash. There are those who understand this very well, and yet are so frightened by the rapid catastrophe that they voluntarily choose it. It’s the worst of all worlds and it comes entirely from a lack of confidence. This confidence is hard earned and the only way to get there is through knowledge and experience combined with real life examples. That’s the role I’m trying to play in this post, along with resources you can find online, including a very comprehensive set from Value Research Online. However, I should note that like all savings, adjusting your investment plan after retirement is something that should be done sooner rather than later. It may be a slow disaster, but the years go by fast and it takes no time for the slow to come.

(The author is CEO, VALUE RESEARCH)

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