8 easy steps for Financial Independence – Step 7 (Financial Achievement)

7-financial achievement-v1_large“No one’s ever achieved financial fitness with a January resolution that’s abandoned by February.”  -Suze Orman

Congratulation!!!! You have achieved almost all your financial goals as per your plan. As mentioned in the previous article (Plan evaluation), if any of your goal has been achieved before the targeted time line, it is advised to withdraw that money and invest in safe place (for example Bank FD).

There is one more way to handle your Retirement Corpus. You have achieved the total amount you need for your retirement as per your plan; hence you want to withdraw all your money and will invest in debt/safe related funds. You can use MIP (Monthly Income Plan) or SWP (Systematic Withdraw Plan) also. This will help you to safe guard your money, as in this stage you cannot take any risk. Also due to various reasons it is not possible for you to start working again, if your invested money went down significantly due to market uncertainty. Hence this makes perfect sense to withdraw all your retirement money and keep in safe funds. Over the years you have gained knowledge of how economics works, which drives the equity market. Also you have planned to spend your retirement corpus for 20+ years, that’s great. People who are now comfortable with the equity market can withdraw the amount you need for 7 years from your retirement corpus and rest of the money can be kept in equity related fund to get good returns. For example you have planned for 20 years after retirement (2036 to 2056).

  1. You can withdraw on the first year (2036) for 7 years (2036 to 2043).
  2. Then after every 2 years (2038, 2040, ….,2048) withdraw the amount you need for 2 years (2044 to 2046). This way your money will grow plus your current requirement will not get affected due to market dynamics. If in any case due to recession, equity market goes down, as you have 7 years retirement fund with you in safe fund, you can give this time to equity market to get recovered. The idea is not to lose money.

Great!!! All financial goals are achieved, no more responsibilities, it’s time to relax and enjoy the rest of our life. I am sure; most of us think that once we retire, we will spend our day the way we want. No need to put alarm before going for sleep, no more rat race on the job, no strict schedule to follow etc etc. Wow life is going to be beautiful and very happy.

Are you sure, if you do not have any schedule for your daily activities after your retirement, life is going to be beautiful?

To answer this question, you can try one thing. Take one week time off from your current job/activity which you are currently doing. Now you spend this whole week the way you want to spend after your retirement. Do not plan for any trip during this week, because the whole retirement days, you cannot be on a trip, make it realistic. Also do not take less than one week time off, because after 2 -3 days only you will come to know the truth (“an idle mind is the devil’s workshop”).

So it’s better to have plan for our after retirement life. Please go through the points mentioned for after retirement life in “Goal Setting” step.

Congratulation once again for your financial achievements. Because “Financial freedom is available to those who learn about it and work for it”. – Robert Kiyosaki

Important Note: It is strongly advised that take professional help to create your Personal Financial Portfolio.

Personal Financial Portfolio life cycle:

Step 1: Awareness

Step 2: Present Financial Status

Step 3: Goal Setting

Step 4: Planning

Step 5: Plan Execution

Step 6: Plan Evaluation

Step 7: Financial Achievement

Step 8: Asset Transfer


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