Time have changed, Have you?

How the time changes, people who were born in the 70s - 80s will be able to know this well of mine and for those who are born after that, they may not have come to believe it but it is important to believe it.

In July 1992, one of my close friend’s elder brother was hired in the bank, at that time the bank FD interest rate was close to 12%. And many financial institutions/NBFCs used to issue bonds with interest ranging from 15% to 18%.The investment in Kisan Vikas Patra (KVP) was doubled in 5 years, which was like interest rate of around 14%.

When one of his senior colleague retired in 1994, at that time he received about Rs. 5,50,000 / - on the basis of the Retirement Fund. At that time my friend’s brother’s whole month salary was probably around Rs.2000 / -. I remember very well, at that time my friend was saying that now he will never come to financial poverty, the whole life will be very easy. The reason for this was that, at that time the interest of 12% interest was Rs.5,500 / - per month, and despite the inflation rate being around 8% to 9%, there was positive rate return. And everyone believed that, now this interest rate is never going to come down and the person who retires will never get into a struggle, and the whole of life will go smoothly.

But if any employee has not done well in his lifetime, then what can happen, this thinking is very terrible.

If we talk about the retirement, I have another assessment which you need to know, at the time of my father’s many people used to get into government jobs from the age of 20 to 23, and their retirement age was 60 years. Apart from this, he used to get pension with full-fledged Dearness allowance (DA). However, in our time, the age of employment in the job had increased to about 25-30 years and the age of retirement is reduced to 50-55 years as elder people get obsolete due to changes in technologies and work culture in the current fast changing world.

It is also important to understand here, that at the time of my father, his job period was from 37 to 40 years, and at that time the nominal life expectancy was from 75 to 80 years, while in our time the job duration is reduced from 30 to 33 years, on the other hand nominal age has gone up to 80 to 85 years old.

And now, if we look at this time, due to studying for higher age, the age of joining the job has gone up from 27 to 30 years, and there is no guarantee that this job will remain till what time, and do not even think of pension. It is kind of 30:30:30 formula i.e. studying till 30, working next 30 years and then 30 years of retirement life.

So it is very important to think about what can happen if you have not planned for your old age in advance, Will you be able to live life the way your grandfather or father has lived on Pension or FD interest?

Time has changed a lot. We have moved on from single Doordarshan channel to multi channels cable TV to NETFLIX. From single land line phone to multi SIM Smart Phones. Similarly it is very important to move on with time and find new ways of investments to cater our current needs. It is always better to plan well in advance and take an expert’s advice so as not to be shocked when you face the real situation.