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Old
age will forever remain a
mystery. To some, it
is a dark thing, full of
fear, and
trepidation. They
don’t want to grow
old. To have their
looks wither away like an
old piece of fruit.
To face their autumn years
with the clammy hand of
death staring them
directly into their
cataract riddled
eyes. Okay, I
appreciate that some
things will remain
constant. You lose
your looks (if any), your
hair (uh...if any) and
your touch with popular
culture (again...if
any). But the way I
see it, it also gives you
rights denied to you by
youth. You instantly
become RIGHT in all
things. No-one dare
disagree with the aged, be
it for fear of vengeance
through incontinence, or
just the fact that anyone
who lives for 75 years
instantly gains
superiority over us "newbie’s".
Old people have it in them
to become little short of
demi-gods. A
potential that is, for
some reason, foolishly
squandered.
An
insight
The
global number of those
above 60 is expected to
touch 2 billion by 2050 of
which India has 77 million
of them, and this figure
will be 177 million by
2025. Of the 77 million
elderly in India, 66
percent can hardly pay for
their basic needs and
there is no social
security system. Pronab
Sen, Adviser, Perspective
Planning, Indian Planning
Commission pointed out
that most of the Indian
elderly do feel that there
is no such social security
system in place which is
the main reason for the
factor of fear. Further
Sen points out that there
is also a persistent
mindset in them for an
emotional security plan.
Interestingly the figures
point out that of the 77
million elderly people in
India, 66 percent can
hardly pay for their basic
needs; 40 percent are
below poverty line; and
another 33 percent are
just above it which itself
proves the fact.
Still
more a factor of concern
is that in India the gray population has doubled
over the past 25 years.
While the numbers have
gone up the quality of
life has come down.
Industrialisation,
urbanisation, migration
and westernisation have
severely affected the
value systems. The
erstwhile joint family,
the natural support
system, has crumbled. The
fast changing life has
added to the woes of the
older person, particularly
in India where 90 percent
of the elderly are from
the unorganised sector,
with no social security at
the age of 60.
Planning
makes a difference
A
better plan for the old
age is much needed to feel
secure said Nidhi Raj
Kapoor,
Head-Communications,
HelpAge India. She adds
that planning includes
monetary plan, emotional
security plan and health
security plan, among which
financial security is a
major point of concern.
The best way to feel
secure financially she
feels is that you make and
plan for investment that
will come handy when you
grow old. In this case
investments mean putting
the earnings in bonds,
securities, insurance etc…..
Nidhi adds that a secured
kind of investment would
be insurance. But it
depends from person to
person. Probably past
experiences of government
instruments would have
influenced such words. But
Pronab Sen feels that
investment may not give
the required comfort but a
strong emphasis on social
security would give the
needed warmth since more
than the financial aspect,
the emotional aspect is
very vital for an elderly.
Financial
security is one of the
most secured ways of
living. This is preached
by many analysts since it
gives independence and
safety. Moreover the
attitude to spend gives
way to the attitude to
save when people are
young. Every human psyche
has this attitude in
general. Nidhi feels that
the best way of ensuring
the security when you
become old is by making
planned financial
investments at young age.
That saves the day for
you. But broadly the
general advice that is
said is, when investing
concentrate on:
- Avoiding discomfort
rather than being
comfortable;
- Check the credentials of
the company you’re
investing in;
- Make it a point to
understand the complex
instruments of
investment;
- Look into the ease with
which you can withdraw
your money;
- Think about long-term
and short-term benefits;
- Don’t get carried away
by brand linkages or
endorsements; and,
- Be aware of the redressal
system.
The
basic principle that needs
to be followed in case of
economic security is to
live with your money. But
Sen points out that
anticipating the financial
needs for the old age will
indeed solve the whole
problem. Nidhi adds that
the more you anticipate
about your old age the
better you get equipped.
This again calls for
planning. Anticipation
paves the way for better
disposable income in the
hands of aged which will
heal the wound of fear.
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The
key benefits
attached with
Varishta Pension
Bima Yojana
-
Annual
return of 9% (LIC’s
average return on
funds invested is 7%
and government to
make good the
difference)
-
Easy premium payment
with no medical
check up.
-
Pension paid during
the lifetime of the
pensioner
-
Maximum investment
Rs.2, 77,490 with a
pension of Rs.2000
and minimum
investment Rs.33,
335 with a pension
of Rs.200.
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What
security means for the
retired?
In
conventional social
classification, the
retired are included among
the "economically
inactive". That might
make it seem that the
economic psychology of the
post-retirement years
would be rather dull. The
retired are, by
definition, no longer in
employment; their
consumption needs are
presumably modest, and
reducing, and they have
long been regarded as
notoriously non-innovative
consumers. This bland
picture is far from
accurate. The elderly,
including some of the most
elderly, are substantially
active as workers,
consumers and savers. In
India the government has a
National Security
Assistance Programme which
provides Rs.75 per month
for a central government
employee whereas a state
government employee gives
anywhere between Rs.100 to
300. Furthermore, in so
far as they do withdraw
from some of the more
typical kinds of economic
behaviour, they serve as
an important comparison
group, through whom we can
hope to understand better,
the behaviour of the rest
of the population. And
finally, the old are the
repository of experience,
in the economic sphere as
in so many others, and
through their memories we
have the opportunity to
contrast the psychological
impacts of different
economic conditions.
Nonetheless, economic
psychology as such has
largely ignored the old.
Precisely
speaking the striking
change in recent years has
been an increasing trend
towards both early
retirement and gradual
retirement. On the other
hand there is always
pressure in case of
government to ensure that
the early retirement does
not give a hollow feeling
to the retired. Some
examples of this are the
recent disinvestment
policies on the Indian
Government from which
there have been a large
number of employee’s
opting for early
retirement, the voluntary
retirement scheme (VRS),
etc… But what becomes a
challenge to the retired
is to find a proper mix of
investments with just the
right amount of money in
right amount of
investment.
A
New avenue, is it still
secure
Older
people are the fastest
growing populations
today. In India we have
one of the largest
populations of the elderly
as compared to anyone in
the world. While financial
insecurity and inability
to work haunt a large
section of older people in
India, the government of
India in the recent budget
announced the Varishta
Pension Bima Yojana.
Highly promoted now as
"Government backed up
scheme" it is
designed in the form of a
fixed deposit scheme with
a one time premium which
will be returned to the
nominee on the death of
the pensioner. But the
feel good factor is that
it is significant in
India, unlike countries in
the west, which does not
have a government security
net for the aged that
could guarantee a minimum
post retirement income and
more so most of the
pension received would be
tax-free.
Anil
Gupta, Regional Manager,
PR & Publicity,
pointed out that
investment and insurance
are two different forms of
security in contraction
to what Nidhi and Sen said
earlier. He feels that the
liquidity factors, the
government backing are the
key which separates these
two. He added that the
Varishta Pension Bima
Yojana also clearly
segments this. Most of the
elderly have widely
welcomed this scheme due
to many advantages as
pointed above but then the
greatest plus point of the
scheme according to Sen is
that the scheme is not
dependant on returns of
the capital market.
What
holds the key?
Even
thought there is a
government subsidised
scheme in place now and
there is a sense of relief
in the mind of elderly,
the key is that is it
still secure. The question
is not yet answered since
financial is not only the
key which is taken care of
by personal judgement, but
emotional security is the
one that is needed to be
given attention too. But
even then as analysts
point out the new Scheme
of LIC has bought the much
needed relief for the
elderly since it is key to
secured living in a
precise manner. Whether
the scheme will succeed or
not that will be answered
in a couple of months from
now when the financial
year comes to an end.
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