I have never really been the planning kinds so when it comes to my finances, investment planning would only make sense if my income was regular and certain. But, as a freelancer , I don’t know what I will get from the next project or whether there will be a project at all. So when the thought of my retirement planning occurred, I knew there was a problem, but I never understood the gravity of it.

But, a recent evening with my college junior Armaan, and his friends, Manoj and Narendra, turned out to be quite the revelation.

“Dinesh, your life is sorted!” Armaan exclaimed, on a high with the beers he had guzzled in the last 45 minutes. “You don’t have to sit here bickering about your bosses like us.” I am sure! I enjoyed doing things on my terms for a change. The only thing that worried me was the lack of a steady income. Manoj agreed as I thought aloud, “Yeah man! I cannot imagine the Systematic Investment Plans (SIPs) I have started without a regular salary. How do you manage your investments?” I sighed. I realized that if I don’t talk about investments, they would somehow go away and not haunt me. But I said it anyway, “They hardly exist!”

Narendra was shocked, “So, you plan on becoming a hippy and shack up at Goa after you retire?” Armaan pitched in Amitabh-style,”Mere paas EPF hai bhai, tere paas kya hai?” And we all laughed.

Manoj calmly encouraged me to think about securing my retirement. “But guys I don’t even know how much money I will make next month. How can I plan for retirement?” I complained. Narendra started, “Look, retirement planning means to have a broad idea about three things: 1. When are you going to retire, 2. How much is your total monthly income and expenses today and 3. What is the corpus required to get you enough money when you retire.” Manoj added, “Basically you have to predict your future monthly expense on the basis of your expenses today. Considering inflation and interest, rates  you can derive at how much money you need to invest now to get that kind of interest at retirement.”

After some calculation, I concurred, “Yeah that is manageable if I average out my income and expenses like rents/electricity/provisions etc. But how will I know where to invest this money to get the desired returns? And, what if I decide to open my music school and need more seed money?”

Narendra answered, “Start with a basic term plan – the cover for which should be eight times your last drawn income. A basic Family Floater Health Insurance can take care of all your hospital needs. Of course, always keep your 12 months expenses for emergencies, in a liquid fund or savings accounts. The rest can be parked in NPS or mutual funds. You even get to choose the equity exposure on these, depending on your risk appetite.”

Self Employed Retirement Plan | PaySense

“And God forbid, if you ever have an urgent requirement, you can always go for collateral-free personal loans online.”  Armaan added.

“Also I think it’s important to keep goals like marriage in mind while investing. So make a plan that is flexible to adapt to the life stage you are in. A good financial advisor is your best friend”, said Manoj.

“Gosh, all he can think about is marriage nowadays”.  I teased Manoj and the boys laughed.

I realised it’s never too late.  It’s important to make a start. Maybe, tomorrow. As I gulped down my beer and wondered about the haywire life I was leading. I thanked them for keeping me grounded,.

Just as all the musical notes create a beautiful harmony, so can a bit of discipline, guidance, a dash of planning and occasional monitoring can make retirement peaceful.