Kamath says earlier generations got lucky with long-term real estate and equity bull markets that helped create a retirement corpus
Online brokerage platform Zerodha co-founder Nithin Kamath has shared some tips with Gen Z and the millennials on savings for the post-retirement life. He said technological developments have led to the retirement age dropping to 50 and life expectancy going up to 80 due to medical advancement.
“What Gen Z & even millennials don’t think about enough is that the retirement age is dropping fast due to technological progress & life expectancy going up due to medical progress. In 20 years, retirement could be at 50 & life expectancy at 80. How do you fund the 30 years?,” Kamath said in a series of tweets.
He added that if climate change does not kill us all, the retirement crisis will probably be the biggest problem for most countries 25 years from now. Earlier generations got lucky with long-term real estate and equity bull markets that helped create a retirement corpus. Unlikely in the future.
So, Kamath advised the youth to stop getting triggered by everyone trying to lend, and stop borrowing to buy things that are not needed or that get depreciated in value.
“Start saving early. Diversify across FDs/ G-Secs & SIPs of index funds/ ETFs. Stocks are probably still the best bet to beat inflation long term. Get a comprehensive health insurance policy for yourself & everyone in the family. One health incident is enough to push most people into financial ruin or set them back many years financially. Jobs don’t last forever, hence one policy outside of what is provided at work,” he advised.
The Zerodha co-founder also said if you have dependents, they should be covered if something happens to you. Buy a term policy with adequate cover. In the worst case, this money in a bank FD (fixed deposits) should cover their financial needs. “But the biggest fix for most people is that they should stop taking loans!”
