Why managing living expenses become a challenge at a later stage of retirement
Everyone creates a retirement corpus to get a regular flow of funds from the beginning to the end of the post-retirement phase. We estimate certain fixed fund flow from this corpus, as a replacement for our salary, supposing it to remain adequate throughout the post-retirement phase. But, we forget to notice the incremental rise in our salary, countering the inflation right from the beginning. This regular increase of funds had been protecting us from the heat of inflation. However, in the absence of incremental rises, the fund starts falling short as we move further in the post-retirement phase. But, we must recognize the fact that living expenses are bound to increase under inflation even after retirement. In the absence of an incremental rise, a steady stream of funds will slowly become insufficient. Initially, we carry a false impression of this being sufficient, but once the purchasing power drops substantially, it becomes difficult to manage. The situation becomes worst if ...