Life begins at 60

Mutual Funds, and equity funds at that, need not be no-no after retirement. It all depends on your financial discipline: this is what we can learn from the indefatigable Mr. Narender Kumar, a retired engineer.

Born in Peshawar, having lost his father in the partition riots, Narender Kumar migrated to Delhi in 1947 in a cargo plane. As a mechanical engineer, he worked for the Railways before landing a job at SAIL's Durgapur plant in 1971. After 32 years of service, SAIL offered an attractive voluntary retirement scheme, which offered a payment of all retirement benefits, with 95 per cent of the last drawn salary as pension until the age of 60.

That, Narender says, suited his 'easy-go-lucky' nature and he took it at 53. 'Of my two daughters, one was already married and living in Mumbai and the other had almost finished education and was likely to enter the job market. I had bought a flat in Indore, so I had no liabilities or worries.' But the pension ran on only until 2006 and Narender was on his own thereafter.

Bank deposits were the obvious choice at that juncture, but they weren't for him, Narender felt. 'I had seen many people who had retired five to ten years earlier and were fully dependent on bank FDs, with nothing else to fall back on. They were now finding it difficult to meet ends. This made me skeptical about keeping the money in bank deposits, as I realised it would not keep pace with inflation.'

Good advice

Meanwhile, in 2000, he had moved to Indore and was lucky enough to find a young financial advisor (Manish Agarwal of Mutual Money). He suggested investing money in mutual funds, about which Narender admits, he 'knew nothing'. He also suggested using Value Research to start learning if he was interested.

Narender's mutual fund investments began in 2000. He began working as a surveyor for insurers. His first withdrawal from his portfolio was in 2005 for his second daughter's marriage. In 2009, he decided to stop working and took his real retirement.

Mutual funds were now the only source of savings, but Narender's investments were by then doing well enough not only to fund his living expenses but also for two domestic vacations a year and a foreign trip once in a while!

'The investments I started in 2000 kept on multiplying. Meanwhile, I kept on learning the tricks and finer points on the Value Research website. In 2006, I decided to take full control of my investments, retaining informal consultation with my mentor Manish Agarwal,' says Narender.

He was far less conservative than his advisor. 'The first decision I took was to switch all my debt funds to diversified equity funds through STPs. Manish tried to stop me, which I overruled. Since I expected to live another 30 years or so (at that time) and planned to remain invested for all the time, why go in for debt funds?' He asks. Today, 16 years after retirement, Narender is independent about his financial decisions, 'thanks to Value Research, which has been not only my main guiding force but also a moral supporter in distressed times,' he notes.

Chalta phirta computer

So, how did he plan his investments? One, his entire portfolio was in diversified equity funds and in the growth option. Two, his minimum holding period is one year, fetching him 'zero-tax' returns, and many of his folios are ten-year old by now (This was before the introduction of long-term capital gains tax in 2018).

Three, he keeps a monthly record of NAVs and diligently computes CAGR returns on them.

'My wife jokingly calls me a chalta phirta computer as I often catch fruit and vegetable vendors for their totalling mistakes,' he jokes. His overall portfolio returns have fluctuated between 6.5 per cent and 36.1 per cent, with the return at 17.5 per cent now.

He opts out of underperforming funds. 'In last few years I have opted out of HDFC Growth Fund (now HDFC Balanced Advantage Fund, Reliance Vision Fund (now Nippon India Vision Fund), Reliance Growth Fund (now Nippon India Growth Fund) and Franklin India Opportunities Fund. Right now, under close watch are HDFC Equity Fund (now HDFC Flexi Cap Fund) and DSP BR Equity fund (now DSP Flexi Cap Fund). But I intend to continue with Franklin India Bluechip, Franklin Prima Plus (now Franklin India Flexi Cap Fund), HDFC Top 200 (now HDFC Top 100 Fund) and Reliance Equity Opportunity (now Nippon India Multi Cap Fund),' he says.

Having burnt his fingers in one NFO in 2006, all NFOs are now a no-no.

Travel plans

Both he and his wife enjoy good health and SAIL provides health insurance. He doesn't own any other insurance. In 2013, Narender and his wife shifted residence from Indore to Senior Citizen Comfort Homes at Ashiana Utsav, Bhiwadi (70 km from Delhi). The cost of shifting, Rs. 10 lakh, was funded by mutual-fund redemptions too. Though he has already withdrawn twice his invested amount, his present holdings are three times his total original investment.

For the future, he isn't keen to accumulate wealth. 'Jab tak hath paon chalte hain, mazza karo' is his motto. He reads books spanning topics from spirituality to thrillers. Occasional games of table tennis, carrom, badminton, chess, cards and FreeCell on the tablet and online snooker are his favorite pastimes. He's confident he will live on for another 20 years and in that time, he has a long wish list of places to visit.

'We have been to almost every tourist attraction in India, from Amarnath to Kanyakumari. Abroad, we have so far covered UK, Egypt, Jordan, Dubai, Europe, Thailand, Singapore, Nepal and Bhutan. The wish list for the near future includes USA, Cambodia and Mauritius,' he says, full of energy.

This story first appeared in January 2016.

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