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The belief that FDs are safe keeps many retired people unaware of the real danger, namely inflation. An annual inflation rate of 5 percent halves the power of your savings, no matter how big the amount is. In retirement, not only safe money but growing money can save your lifestyle.
New Delhi. A 67-year-old retired man thought that an FD of Rs 1.2 crore would give him a comfortable life. But as soon as CA Nitin Kaushik understood their plan, he told that the real danger lies somewhere else, whose name is inflation. He explained that even if money remains safe in the bank, its purchasing power gradually reduces. According to 5 percent inflation rate, the value of Rs 1 crore in 20 years becomes only Rs 50 lakh. That means the money remains the same, but prices double and life becomes more expensive.
Why is it dangerous to rely only on FD?
Retired people often invest their entire money in FD to avoid risk. But Kaushik says that today people are living longer lives. Even after the age of 65, a life span of 20–25 years is common. In such a situation, secure capital alone is not enough, but the ability to meet ever-increasing needs is necessary. Money does not grow in FD, it only remains safe. In such a situation, health expenses, lifestyle and inflation together make the retirement plan weak.
Balanced portfolio is the real security
Kaushik’s advice was that retired people should divide their investments. For this, 70 percent in bonds to get stable returns, 20 percent in good dividend stocks so that money grows in the long term and 10 percent in liquid funds so that cash is available for sudden needs. This approach is not high-risk but a sensible balance, which helps fight inflation and keep money productive.
Zero-risk investing is a myth
Kaushik stressed that no investment is completely risk-free. Even cash loses its value due to inflation. Therefore, it is most important for retired people not to lock their money, but to keep it working. Retirement is the time when not your income but your money earns for you and only then life becomes comfortable.
