One of the most commonly held notions is that once a person owns a house and his or her children are securely settled in life, the only requirement left in old age is dhaal and roti (lentils and bread). This is far from the truth. In retirement too a person will have to spend money almost at the same level as in pre-retirement. The only expenses that may not be required are expenses related to children’s education and marriage. But this is only one part of the total expenses.

Socially ordered expenses

Some expenses in old age are incurred because the person is living in a society and has to follow social norms. Such expenses post retirement include: travelling to meet family members, hosting family members at your home, attending and spending on gifts for the marriage of the children of near relatives and friends, travelling to homes of children (depending on where they stay, the cost can be very high, e.g. if they are staying in a foreign country), birthday gifts for grandchildren, children requiring money for purchase of a house or starting a new business, and so on. In most of these cases most individuals feel that they are compelled to incur expenses as a social requirement.

Expenses based on interests and needs

Then there are expenses that are not socially determined, but stem from the interest and needs of the senior citizen. For example, expenses related to interests are: wanting to travel and see new places, travel for pilgrimage, hobbies and interests, desire to undertake social work and so on. Expenses based on needs include: repairs and maintenance to house (including painting once a few years), purchase of clothes, vehicle maintenance, etc.

Both, expenses that are determined by interests, and by the needs of living expenses, are quite large.

Medical Expenses

Finally there is the question of medical expenses. Medical expenses are not an option and it is best to have medical insurance for the same. However many senior citizens, unless they had planned for it in a period when they were medically fit, might find it difficult to be insured for hospitalization. For example a person who has had a heart attack will find it very difficult to get medical insurance. Even for those who had planned well in advance the premiums go up as the person ages. The older you are the more premium you pay. The cost of medical requirements can be very high and it needs careful planning.

Discuss the Costs of Living post retirement

It is important to discuss with our customers all these expenses when we are doing retirement planning of customers. The likely expenses because of social pressures, because of interests, because of the needs of living, and medical expenses should be discussed in detail with every customer. We should help customers to get out of the Dhaal-roti syndrome and help them to knowledgeably plan for their old age. So that they lead a life of dignity. While the amount of expense may vary, based on the economic status of the customer, the expense heads will more or less be the same for all. E.g. A poorer person may plan for a smaller gift on the marriage of his brother’s son, while a richer person may plan on a more costly gift.

Retirement Planning is a Noble Activity

Undertaking proper retirement planning is also a noble task (just as in the case of selling a life insurance policy). Post retirement, when your customer is old and is not getting opportunities to earn money and may also have some medical issues, it is the money that you have helped him or her save that is going to save the customer and provide him or her old age dignity. You are insuring the risk of living too long.

Sell Risks not Returns