Mr Chopra was distraught. His wrinkled face was in pain. “All my life I have paid income taxes, sales taxes, value-added taxes,” he laments. “I have lived one-third of my life for the government. Now that I am old, no government pays me a pension or medical expenses.”
Mr Chopra is a retired general manager of a steel company. His son lives in Madrid and is struggling. He is unable to send money to his father.
Unfortunately, the budget presented in the Indian Parliament this year does not address the issue of old-age pensions. India does not have any pension schemes or medical insurance for its senior citizens. Many elderly people regret they did not save enough or invest wisely in their younger days.
The need for financial planning and providing for the future is exacerbated by the crumbling of the joint family system in South Asian countries like India and Pakistan.
From the 1940s to 1960s, elderly people were insulated from financial pressures since the family provided for them. With youngsters now leaving the family nest when they get a job, elders are compelled to look after themselves. There are few old people’s homes in India, and they are expensive.
As you get older, medical expenses increase and without insurance one has to rely on investments made in younger days. However, youth is a merry time when you want to travel and savings take a back seat. Nevertheless, it is useful to have a savings target.
In my younger days in 1943 in Lahore, my monthly salary was about $3 (Dh11). Even so, I would make a budget. There were always unanticipated expenses and I exceeded my budgets, but I set myself a savings target at the start of each month and managed my expenses with the balance salary. This practice helped me.
Setting a target also compelled me to buy what was necessary and not what was nice to have. It helped me to eliminate wasteful expenditure. I found I would buy extras of everything I liked, to store for future use. For instance, if I liked a particular formal shirt, I would buy three of them, until I worked out this was a wasteful habit.
Next, it is crucial to estimate how much money you’ll need after you stop working.
Savings also need to be invested wisely, so that the money grows. All our lives we work to earn and save money. As we grow older, it is time to make that money work for us.
Acquiring shares of reputed companies is a sound investment. Fixed deposits with banks are a safe way of saving, though not very remunerative.
My friend Kanti Lal invested all his savings in real estate and purchased six apartments in Mumbai.
Since the property market has galloped ahead in the last two decades in Mumbai, he is an affluent man.
“You see land is finite. But the population is increasing, but apartments will be in perpetual demand,” he opines.
Savings are like tender plants. They have to be nurtured. I devote the first Saturday of every month to review my investments. Keval, a rich friend of mine, reviews his portfolio every week.
Ensuring financial comfort for old age is an important duty during one’s youth. It is especially critical in countries that do not offer old age pension to senior citizens.
However, saving money and investing it wisely requires time and effort. For every month of working to earn money, you need to set aside a day to invest it smartly. To make money work for you in later years, it is provident to begin early. It should never be taken for granted.
Hari Chand Aneja is a 93-year-old former corporate executive who keeps busy with charity work and his investments
