Jul 18 2016 : The
Economic Times (Bangalore)
GUEST CORNER - Women
need to plan retirement better
| Abhimanyu Sofat |
Higher life
expectancy, lower pay and fewer work years necessitate thorough planning.
The United Nations
Department of Economic and Social Affairs, in India, the life expectancy of
women is 69 years and, of men, it's 66 years.Due to this, a woman will need an
additional `55 lakh to manage her living expenses (see table).
Besides, usually,
women work fewer years compared to men to take care of children and
family.Further, a recent study by Korn Ferry Hay Group shows that women in
India earn 18.8% less than men. Not to mention, a higher life expectancy can
also mean higher medical expenses as the likelihood of health ailments such as
diabetes, high blood pressure, joint pain etc. increases with age.
What to do?
Women should invest a
substantial part of their income regularly, right from the early years of
employment in order to build a sizeable retirement corpus. A young woman should
allocate a major part of her portfolio to equity mutual funds in the early stage
of her career. Financial knowledge is key. Women should increase their
financial know-how. This will help them make the right investment decisions and
generate better returns on investments.
They should make retirement
planning top priority, it is important that a woman starts investing in
financial instruments. They should also work for a longer period to accumulate
greater wealth as the benefit of compounding is at its best during the later
years of one's accumulated corpus.
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