You have reached the peak of your career and are in your early 50s, and retirement is about a decade away. You may still work after retirement, but the job you have been doing might be different from what you do, and the income will be lower. One must plan for retirement when the earnings are nil or low, but the expenses continue. In fact, they may increase because of additional healthcare expenses or other lifestyle changes.

Here is a 10-point checklist for a decade before retirement

Where Do You Plan To Retire?

Consider the cost of living in that place and other incidental expenses around moving (if it is in a different city). “This should be the basis of all the calculations,” says Renu Maheswar, chief executive officer, and principal advisor, Finzscholarz Wealth Manager, and a Sebi-registered investment advisor.

What Do You Plan To Do After Retirement?

The age of 60 is too young to retire these days. “Plan for courses and skills to be picked if you want to pursue your dream vocation after retirement. Traveling, hobbies, socializing, volunteer work – everything costs money. Include them in your estimates of corpus calculation,” says Maheswari. Of course, these can also help you to supplement your income in retirement and that is a good thing. But do not bank on that, not too much at least.  

How Much Money Will You Need To Live That Lifestyle?

Take professional help to calculate the corpus needed for retirement. A decade will give you enough time to undo the mistakes of the past. Remember that your calculations need to factor in inflation when making these calculations. If your current living expenses are Rs 1 lakh per month and you want to have a similar lifestyle after retirement ( after including golf club memberships), the same will cost you Rs 1.96 lakh the first month after retirement at seven per cent inflation, and will only go up.  

Will You Have Other Financial Goals When You Retire?

Include the unfinished financial goals requirement in the corpus calculation. Normally, it should not be the case, but if you have a kid who will do his or her higher studies after you retire, that needs to be factored in. There could be other such financial goals to attend to.  

What Will Be The Status Of Your Loans When You Retire? 

Plan to clear all your debts in the next decade. With an increase in rates, if your home loan tenure is extending beyond retirement, you should increase your EMI and close it before you retire. Other high-cost debts like credit cards and personal loans should also be cleared.  

What Is The Status Of Your Current Retirement Funds? 

“This, along with the corpus requirement, will give you a target for monthly saving. Now is the right time for course correction,” says Maheswari. Let us say that you need your corpus to grow by Rs 1 crore in the next 10 years, and you see your savings are not enough. Then you need to increase your savings to Rs 43,000 every month at an assumed rate of return of 12 per cent to reach the desired corpus.  Of course, you need to factor in that you will be invested in debt for the last two to three years.

Do You Want To Leave An Estate For Your Children? 

Plan from now. If yes, then you need to consider the current asset allocation and invest accordingly.

Have You Provided For Medical Issues During Retirement?

“If you have corporate insurance alone, start another personal health insurance which can continue even after you retire from your corporate job,” says Maheswari. Over and above the insurance, you need to build a healthcare corpus to pay for your out-of-pocket medical expenses, which may not be covered by your health insurance if it has copay and exclusions.

Will You Have Enough Liquidity, When You Retire?

“If your investments are real estate heavy, make sure that you liquidate them during this decade at good prices,” says Maheswari. Selling off a piece of real estate can be time-consuming; if done in a hurry, it may not fetch the right prices.  

Check Your Asset Allocation 

“The worst mistake that people make is to create a conservative portfolio in the run-up to retirement,” says Maheswari.  While you need to move your retirement corpus into debt a few years before retirement, 10 years is a long time to stay invested and reap the benefits of equity markets.

“Take advantage of the next golden decade to grow your wealth through equity,” she adds.