Comfortable life in Present & After Retirement: Need to Keep an Emergency Fund.!

by Mr. Anil Chopra, Bajaj Capital

We Indians are savers by nature. We wish to grow wealth to live a comfortable life in present & after retirement. These are some facts that most individuals know & plan for.

One more aspect of planned financial life is keeping a provision for emergencies, which is the most uncertain part of financial planning. When we think of emergencies, the first thought that comes to mind is medical needs and more specifically, medical needs post retirement. It is, indisputably, one of the most uncertain certainties.

Most financial plans cover this need through retirement planning. In retirement planning, based on the anticipated post retirement expenses, a desired corpus is arrived at for a person who is still earning.

 

Anil Chopra,
Bajaj Capital

Accordingly, his / her regular savings are allocated for the achievement of this retirement corpus & other life goals. But, there can be many others.

In the past couple of years, when we have seen not-so-good state of the world economy, many people lost their jobs and some had to face hard times on financial side.

This is where income replacement theory works for people who are still a long way to retirement.

Generally, income replacement is considered only for retiring or retired people, while it is true for people of any age. There are options available that provide cushion through regular income in case of loss of job, accident or / disability.

It is not necessary that one should buy an investment or / insurance product only to provision for emergency needs. It can be done very easily with a small savings, say Rs. 500 per month, till retirement.

About the author..

Mr. Anil Chopra is Group CEO at Bajaj Capital

Mr. Anil Chopra is the Chief Executive Officer & Director of Bajaj Capital Limited. He joined the Company in 1984. Mr. Chopra has been instrumental in expanding the branch network of Bajaj Capital Ltd. all over India.  A Chartered Accountant and a Certified Financial Planner, Mr Chopra is credited with introducing international accounting and HR practices in the organisation. His most valuable contribution, however, has been in building up a financially literate society and making Bajaj Capital a strong retail brand. He is considered an authority, and is widely sought after by the media for quotes on key developments in the industry.

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