Retirement Planning

As you near retirement, it is important to know how best your investments can provide regular income and how much risk you should take with your portfolio. This requires designing an investment strategy that considers your personal situation and has a specific withdrawal plan.

Our services give you personalized plan that can go a long way in achieving your goals. As a first step we spend time with you to understand your risk profile, preferences and collect information that would help us design a customized plan.

First Step

A retirement plan needs to have both income and growth component. Income generation is a core expectation but growth is as important. Growth in the portfolio is required to counter the impact of inflation over a period of time. As a first step we profile you and your requirements. This helps us understand your present situation and your key financial objectives.

Know More On Changes In Financial Objectives Of Retirees

The changing landscape: More Dependence on your Retirement Corpus: It is really great if you have a pension plan sponsored by your employers. Most of the employers have moved away from sponsoring the pension (Defined Benefit) to Defined Contribution. This means that your assets need to be managed so that you get regular income.

We are living longer: The average Indian now lives for up to almost 65 years, compared with 48 years in 1970. The life expectancy is expected to further rise in the coming years. It is expected to reach 72 for males and 76 for females by 2025 , according to a planning commission report.
This just means that our investments need to be used for a longer period of time. Traditional investment strategies of just depending on fixed deposits and small savings schemes may not be always work well.

Cost of living rising: About 60 years ago, an average middle class person earning Rs. 600 a month, could well support his family. Today, it takes about Rs. 30,000. Likewise, there will be a continuous price rise over a long period. If you plan to maintain your current lifestyle even after you retire, you would need to build in an inflation-protected portfolio.

Healthcare costs sharply rising: Healthcare costs are on the rise, and they are significantly outpacing consumer inflation averages. In India, medical inflation has been running into double digits -- at the rate of 18-20% every year. As healthcare expenses go up in retirement, it is important to have adequate health insurance in place and also build sufficient retirement corpus to take care of our needs.
A retirement plan is about assessing your situation to give you a customized plan so your investments can take care of these new requirements.

Plan Preparation

Your plan is prepared with great care by our expert team of financial planners and requires considerable effort to be made. We look at over 2.5 million investment paths while preparing your plan. This is all to ensure that you get an advice that is just right for you.

Know more on our methodology

Our Financial and Retirement Planning approach is based on Modern Portfolio Theory (MPT) and places your asset allocation strategy at the core of the plan.

The seminal portfolio theory proposed by Harry Markowitz, a renowned American economist, remains even today a core model for defining asset allocation strategies and managing a portfolio.

We start with our long-term market expectations that comprise the current macro-economic scenario, asset volatility and other statistics. This forms the basis for selecting efficient allocations. To recast the performance of these efficient allocations in the future, we use simulation techniques and recommend a unique path for every investment that you make towards a goal.

Traditionally methods in financial planning are based on deterministic models. These models though simpler to implement, do not always consider short-term risks. Our approach adopts a more contemporary and probabilistic approach which blends in the MPT to give an asset allocation strategy.

In many ways retirement planning is a cash flow jigsaw puzzle. There are your investments on one side and regular cash requirement on the other. So the investments have to be placed in a way that you have enough or more cash when you need at the same time the investments grow to take care of the impact of inflation in the future. Your yearly investments for every goal can take a different path depending on the type of the goal and the horizon. For every goal, we choose the best path from over 2.5 million simulations for each of your annual investments for these goals.

Once we collect the information on your goals, current financial assets, income and other details, we work on a customized retirement plan for you. Our recommended financial action plan gives you a savings rate to adhere to, an optimal asset allocation to do an immediate re-balancing, and a target asset allocation for future investments. Your allocations can also be tracked online so that you can invest based on an action plan, which is based on your goals and a scientific approach.

Know what you can expect in the Plan

Our financial planning service handholds you through all the steps of the financial planning process at your doorstep. Our service is focused upon:

Your Income - Expenses Analysis
It helps you understand your spending pattern and guides you in managing your expenses, if any, in order to increase your investible surplus and achieve your goals.

Goal Planning
Planning your goals is the crux of financial planning process. We help you identify, prioritize and achieve your life goals, including retirement, through comprehensive analysis.

Asset Allocation
is the single most important factor in investment success. We identify your current asset allocation and recommend a suitable one based on your goals.

Insurance Planning
Being adequately insured is must in order to protect your family in case of an untoward event. We identify your insurance requirement against possible risks and suggest you the suitable way forward.

Cash Flow Management
Forecasting your future cash inflows and outflows at various life stages can be a complex task. We help you make it easier.

Online Tracking
Our service also helps you track your portfolio online.

Click here to view our Sample Retirement Plan

Intelligent Track&Act™ Platform

Once the plan is ready, it is incorporated on your ICICIdirect.com account so you can execute and track your plan online, at your convenience and at all points of time. A new advisory platform Track&Act^TM will be enabled on your account.

Our intelligent Track&Act^TM platform works 24 hours and gives you triggers if you are maintaining your asset allocations right, help you track if your withdrawals as per the plan and even advice you where to invest into or withdraw from.

Know more on Track&Act^TM

Keep a track on your asset allocation and balance as per plan. While each of your goals are covered with a different asset allocation strategy, for your ease you need to just monitor the overall asset allocation.

Know if you are withdrawing enough as per plan

And track if your investments are growing as per expectations.

The intelligent system also guides you on where to invest if you have a surplus and where to withdraw from your investments

Know More On Generating Retirement Income

For those of us used to getting a regular salary credit at the end of the month, generating retirement income from investments can be a bit different and may appear complex.

There are limited products that can truly replace a salary credit. And many of such products may not give you a pay hike i.e adjust to inflation, at the end of the year. The other issue is that we look at an interest payment, dividend payout or a bonus as different from capital appreciation. We treat an investment which gives an 8% return through a dividend or an interest payout different than an investment that may have appreciated by 8% in the same period. Withdrawing from interest and dividends feels much easier than actually withdrawing the same amount from an appreciated investment.

In real terms, Interest, Dividends, Rentals and Capital Appreciation (How much your investments become after a period if they remain untouched) are all related. It is best to look at a Total return from an investments instead of individual components. This approach will not only help you earn better but will increases your investment options.

With our retirement planning services we help you create a withdrawal plan and also help you actually monitor your plan. This means you can easily take a decision on which investment to withdraw from in the most efficient manner.

What's More

You get quarterly review on your progress by our expert financial planner. You have access to a toll free number where you can ask any personal finance, basic tax queries or even questions on Will Drafting free of cost. We have a panel of finsancial planners, Chartered Accountants and lawyers to help you with the queries.

The advise you get is under the Investment Advisory Regulations 2013 by SEBI, so you know that you get advice from qualified advisors and advice that is in your best interest.

Know how investment advisory regulations impact you

The Investment Advisors Regulations put down guidelines and qualifications on who can advise you. Any one registered under the regulations is required to adhere to these guidelines.

ICICI Securities Investment Advisory Services is registered with SEBI as an investment advisor and you can be assured that you receive an advice that is in your best interest.

Investment Advisory Services are fee based services. You may ask, why do we charge when advice is freely available ... A professional advice whether it is by a doctor, a lawyer or an accountant is always paid for. Your plan requires considerable efforts as it takes into account your personal situation, your risk perception, and the economic situation to give you advice that is just right for you. The report is made by a professional who considers various scenarios before dispensing an advice. Because you get a plan in hand, you do not end up buying a product that is not suitable for you. Remember that a bad free-advice can turn up to be more expensive if you buy a product or follow an investment strategy that is not suitable for you.

"This service is available in 3 variants with fee ranging from ₹ 7,500 to ₹ 17,500 (inclusive of all taxes), to be paid upfront. The variant with in-person discussion with advisor is available at limited cities only. To know more, please write to us at fps@icicisecurities.com."

Know more & Subscribe

Sample Retirement Plan