Friday, August 3, 2012
This is a guest post written by Manikaran Singal who is a certified financial planner and runs a personal finance blog - Good Moneying. Retirement is very important and critical stage in one’s financial life. This stage can be made more enjoyable where you relax, spend time with family, pursue hobbies if you have properly planned for that. But it can be most horrifying phase also where your regular income stream is no longer available, with no pension provision and where you have not saved enough to take care of your retirement needs. Due to the various challenges and risks associated with retirement, we recommend retirement planning should be given its due importance and starts as soon as possible. Retirement Planning works in 3 steps – Accumulation – Preservation-Distribution. Accumulation is the stage where we invest to generate a decent corpus which is assumed to take care of us during retirement years. This accumulation we do till retirement. In Preservation stage we become cautious about our accumulated corpus and we start coming out of risky asset classes and start shifting the corpus into debt, though savings doesn’t stop during this stage also, as our regular income stream is intact. Distribution is the stage when we make arrangements to use the corpus through interest, dividends and withdrawing capital which we have accumulated. In the complete retirement planning, distribution is the most important of all, as all our efforts of accumulation and preservation were directed towards this stage only. With a regular income stream no longer available, the savings made over one’s working years now have to provide for all needs. Now your investments need to create a paycheque for you. In accumulation and preservation stages the mistakes can be ignored as you were getting regular income, but at distribution stage, small mistakes can cost huge. Through this article, I will be discussing with you on the distribution stage of retirement planning and how you can plan your investments once retired. 1. First step is to prepare you on the risks front. Like : a) Longevity risk: We don’t know for how long we are going to live. Whatever life expectancy you have assumed during accumulation stage may not be correct. If you outlive that age and not used your corpus judiciously you may find yourself in financial soup. b) Health risk: At this age probability of health problems is much more. We don’t know till when health remains favorable on our side. And when it gets unfavorable how much of our accumulated corpus it may wash away. 2. Have a look at your expenses. This is very important as the ultimate target is about to generate comfortable income stream from the corpus to meet the basic and desired expenses easily. Here you may divide your expenses in 4 parts: Basic/desired/on dependents if any/Loan EMIs if any. Basic would include the family’s general and unavoidable expenses which may include the family gifts on various festivals/occasions, desired is what you want to do after retirement like going on annual or bi annual vacations, pursuing some hobby, some charitable or religious activity etc., On dependents means…situations where children are still studying or are not yet settled in life etc. and Loan EMIs. 3. Investment Options. When you have calculated how much is required, now is the time to look out for the options where you may park the lump sum amount to start getting regular income. Here one thing has to be noted that one should not ignore the growth aspect in investments and should give equal importance to that. To add to it, one should not get into wrong products with the lure of making fast money in the name of growth. Just reminding you again that mistakes made at this stage of life may prove very costly. Make 3 investment buckets by investing corpus in different percentages. Basic Bucket (50% -60%): Looking at the monthly requirement and pension inflow if any, one has to plan to fulfill the gap, for which one may use the products like Post Office Monthly Income scheme, Senior Citizens savings scheme , bank fixed deposits with monthly/quarterly pay-out options, Immediate annuity etc. I mean use those products which can supplement your monthly inflow. But here do keep in mind the taxability aspect also. All the so called safe instruments are taxable. So where the taxation crosses the acceptability criteria, then you may use Mutual funds Monthly income plans or park the amount in debt mutual funds and start systematic withdrawal plan, but please note in the latter you are withdrawing the capital part of corpus which should be last resort. Health Bucket (10%-15%): After arranging for your current monthly requirement, put some percentage of your corpus into debt mutual funds or cumulative fixed deposits as a health fund which will take care of your those medical emergencies where expenses jumps over health insurance coverage. Growth Bucket (20%-25%): Put the balance corpus or at least 20% of the total corpus in equity oriented Mutual funds diversified or index, to cope up with the inflation aspect and After every 5th year transfer the growth portion into the basic bucket, so the monthly income can be supplemented and put it in line with the increased expenses. Some Do’s and don’ts after Retirement. Do review your financial situation every year. Do buy adequate health insurance coverage for yourself and your spouse. Count the annual premium in the basic expenses. Don’t buy or gift any investment product to any of your family member other than you or your spouse. Avoid gifting child plan to grandchildren etc. Don’t part with your savings in your lifetime. You will be soft emotionally gullible target to the sellers. So beware. Do keep working even after retirement. Shocked!! But in many cases it becomes inevitable especially when you still have dependents, or paying Loan EMIs. The idea is not to enter retirement phase with the burden of Debt and dependents, and not to use the nest egg on these areas. Also please understand that stock trading is not working. Do take good care of your health. If at all you have any health problem better to take proper treatment. Many times I have seen people ignoring the health aspects due to the finances involved in the treatment. But please understand that your health is equally important for your wealth. Don’t overspend in retirement if you have not over invested while working. Don’t put your retirement corpus into Real estate due to the illiquid and unregulated nature of investment. Retirement planning includes much more than just investing. It needs some behavioral adjustments also. The ultimate goal is steady, dependable and lasting income. With careful planning we can balance the needs of inflation protected income and long term growth during retirement.
Today it found out why the sky is blue. For the short answer, when light from the sun enters our atmosphere it collides with molecules in the air. The blue part of the light gets scattered more than the other parts during these collisions and thus makes the sky appear to our eyes as blue. If the light from the sun took a straight path down to our eyes with no scattering or absorption in the atmosphere, the sky would in fact look much as it does at night in the day time. So a little background. White light waves from the sun are in fact mixtures of all colors of the light spectrum. Anyone who’s ever had a prism knows that when white light shines through it, the light gets separated and you get a rainbow spectrum showing up on the other side. Humans can only see a portion of the total light spectrum of energy; we see from Violet, which has a wavelength of about 380 nanometers, to red which has a wavelength of about 720 nanometers. Descending from red to violet, we get orange, yellow, green, blue, and indigo between the two. Another needed piece of information is that the atmosphere of the earth is made up of almost all nitrogen and oxygen. So specifically, what is happening here is that because the wavelength of blue light is about the same size of an atom of oxygen, which makes up 21% of the earth’s atmosphere, blue light gets scattered by these oxygen molecules while the reds, oranges, and others more or less pass straight through the atmosphere without being scattered much at all. So when you look up at the sky, everywhere you look looks blue as the blue portion of the light spectrum bounces off an oxygen molecule and into your eye. It actually turns out that the earth’s atmosphere is also scattering quite a bit of violet light as well. So why doesn’t the sky look more like a blueish/violet? This is for a few reasons. Most important is that our eyes are most sensitive to blue, red, and green. So our eyes are naturally more inclined to respond to blue over violet. Also important is that the sun doesn’t put out light at the same intensity at all wavelengths of the spectrum. In addition to this less amount, some of the violet also gets absorbed in the upper atmosphere; so not as much of it gets to our eyes. So it turns out more or less a combination of these three things makes it so we see the sky as blue instead of violet or blueish/violet. It is interesting to note however, that our eyes are picking up some of the violet and indigo being scattered. Without this, we would in fact see the sky as more of a blueish green. This is because the green cones in our eyes respond to the small amounts of scattered yellow light wavelengths to some extent; meanwhile our eye’s red cones respond to the indigo/violet somewhat which balances things out a bit and so we only perceive the blue being scattered. So you might now be asking, “Why is the sky red or orange when the sun is setting?” What’s going on here is that as the sun is setting, the light you are seeing from it is having to travel through a lot more atmosphere given your angle to the sun. Light at lower wavelengths gets scattered more than at the higher wavelengths. So less of the blue light gets to you as it’s being scattered more than, for instance, yellow, orange, and red. In this case, if it is a relatively clear day, the sky will appear more yellow than blue as you watch the sunset because the blue is being scattered so much it never reaches you or at least, not as much of it, but the yellow isn’t scattered nearly as much but still scattered enough to make the sky look yellow. If it is dusty or there are a lot of other types of particles in the air along the path to where you are looking at the sun, the sky will appear more red. If there is a lot of salt in the air, such as at sea, it will appear more orange. So, if there was no scattering or absorption, the sky would appear black in the day time. If there was more absorption or scattering going on than there is, then the sky might appear to us to be yellow, orange, or red all day long.
1. Cucumbers contain most of the vitamins you need every day, just one cucumber contains Vitamin B1, Vitamin B2, Vitamin B3, Vitamin B5, Vitamin B6, Folic Acid, Vitamin C, Calcium, Iron, Magnesium, Phosphorus, Potassium and Zinc. 2. Feeling tired in the afternoon, put down the caffeinated soda and pick up a cucumber. Cucumbers are a good source of B Vitamins and Carbohydrates that can provide that quick pick-me-up that can last for hours. 3. Tired of your bathroom mirror fogging up after a shower? Try rubbing a cucumber slice along the mirror, it will eliminate the fog and provide a soothing, spa-like fragrance. 4. Are grubs and slugs ruining your planting beds? Place a few slices in a small pie tin and your garden will be free of pests all season long. The chemicals in the cucumber react with the aluminum to give off a scent undetectable to humans but drive garden pests crazy and make them flee the area. 5 Looking for a fast and easy way to remove cellulite before going out or to the pool? Try rubbing a slice or two of cucumbers along your problem area for a few minutes, the phytochemicals in the cucumber cause the collagen in your skin to tighten, firming up the outer layer and reducing the visibility of cellulite. Works great on wrinkles too!!! 6. Want to avoid a hangover or terrible headache? Eat a few cucumber slices before going to bed and wake up refreshed and headache free. Cucumbers contain enough sugar, B vitamins and electrolytes to replenish essential nutrients the body lost, keeping everything in equilibrium, avoiding both a hangover and headache!! 7 Looking to fight off that afternoon or evening snacking binge? Cucumbers have been used for centuries and often used by European trappers, traders and explores for quick meals to thwart off starvation. 8. Have an important meeting or job interview and you realize that you don't have enough time to polish your shoes? Rub a freshly cut cucumber over the shoe, its chemicals will provide a quick and durable shine that not only looks great but also repels water. 9. Out of WD 40 and need to fix a squeaky hinge? Take a cucumber slice and rub it along the problematic hinge, and voila, the squeak is gone! 10. Stressed out and don't have time for massage, facial or visit to the spa? Cut up an entire cucumber and place it in a boiling pot of water, the chemicals and nutrients from the cucumber will react with the boiling water and be released in the steam, creating a soothing, relaxing aroma that has been shown to reduce stress in new mothers and college students during final exams. 11. Just finish a business lunch and realize you don't have gum or mints? Take a slice of cucumber and press it to the roof of your mouth with your tongue for 30 seconds to eliminate bad breath, the phytochemcials will kill the bacteria in your mouth responsible for causing bad breath. 12. Looking for a'green'way to clean your faucets, sinks or stainless steel? Take a slice of cucumber and rub it on the surface you want to clean, not only will it remove years of tarnish and bring back the shine, but is won't leave streaks and won't harm you fingers or fingernails while you clean. 13. Using a pen and made a mistake? Take the outside of the cucumber and slowly use it to erase the pen writing, also works great on crayons and markers that the kids have used to decorate the walls!!