a. Medical or contingency corpus - Medical expenses can take a toll on the retirement savings if not planned well. Ideally, one should have a reasonably large medical insurance as one heads closer to retirement. In absence of the same or if the insurance cover is not sufficient, one can set aside some amount towards a medical contingency corpus. This can be set aside in safe instruments such as fixed deposits or debt mutual funds.

b. The next bucket should comprise investments which have a potential of generating a regular passive income to take care of the living expenses. This portfolio would comprise mostly debt and fixed income instruments and typically form the bulk of the post retirement portfolio. One can look at bank and corporate fixed deposits with regular interest payments, debt mutual funds with either dividend option or with a systematic withdrawal plan attached to it, senior citizen savings scheme, post office monthly income scheme, immediate annuity plans and either primary or secondary markets bonds generating interest. This fixed income portfolio should be designed keeping tax implications in mind.

c. The third bucket could be money which is not required in the short term and would not be touched for upward of at least 7-10 years. This money can be invested in equity either via shares route or using mutual funds. One should not blindly shun equity asset class during the retirement years because it is perhaps the only financial asset class which can beat inflation over long term.

The allocation to the above buckets would vary for every retired couple depending on different variables such as corpus accumulated, goals during retirement years, sources of income and level of expenses. A larger principle that can apply though is to maintain liquidity to tide over any emergencies, seek investments which can generate a regular passive income and invest a part of the portfolio into high risk investments for longer duration.

Assuming that one outlives the financial resources but owns a property in which the person resides, there exists the option of reverse mortgage to generate income stream out of self- occupied property. In reverse mortgage, the owner can pledge his property with the bank against which the bank provides a series of cash flows for a fixed tenure, something like a reverse EMI.

While designing the post retirement portfolio, one should first clearly define the objectives to be met and accordingly invest the money in appropriate instruments. It may be a good idea to seek help of a professional to advise the best course of action.

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