Zerodha's Nithin Kamath gives 5 tips to avoid ‘retirement crisis’
Nithin Kamath, founder and CEO of online brokerage firm Zerodha, has warned Gen Z and millennials about a 30-year “retirement crisis” and shared tips on how to avoid it.
Taking to his Twitter account, Kamath said retirement age is dropping fast due to technological progress and life expectancy is going up.
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According to him, in such a scenario, in 20 years’ time, retirement could be at the age of 50 and life expectancy at 80. He shared his advice to fund the 30 years of post-retirement life.
“What Gen Z & even millennials don’t think about enough is that the retirement age is dropping fast due to technological progress & life expectancy going up due to medical progress. In 20 years, retirement could be at 50 & life expectancy at 80. How do you fund the 30 years?” he wrote on his Twitter handle.
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“If climate change doesn’t kill us all, retirement crisis will probably be the biggest problem for most countries 25 years from now. Earlier generations got lucky with long-term real estate & equity bull markets that helped create a retirement corpus. Unlikely in the future,” Kamath, who founded Zerodha in 2010, said.
Here are Nithin Kamath’s five tips to avoid a “retirement crisis”.
1. Stop getting triggered by everyone trying to lend and stop borrowing to buy things you don’t need or depreciate in value.
2. Start saving early. Diversify across FDs/G-Secs & SIPs of Index funds/ETFs. Stocks are probably still the best bet to beat inflation long term.
3. Get a comprehensive health insurance policy for yourself and everyone in the family. One health incident is enough to push most people into financial ruin or set them back many years financially. Jobs don’t last forever, hence one policy outside of what is provided at work.
4. If you have dependents, they should be covered if something happens to you. Buy a term policy with adequate cover. In the worst case, this money in a bank FD should cover their financial needs.
5. But the biggest fix for most people is that they should stop taking loans.
