MFDs should create a sense of ‘retirement as fun’ among their clients

Ankur, HSBC Mutual Fund has started a new initiative called ‘Retire To More’. What is this initiative about, and why was it launched?

Normally, when we speak about retirement, the focus is only on one thing, whether a person will have enough money to survive. But we believe this is an incorrect way to look at retirement.

The idea behind ‘RetireToMore’ is that retirement should not just be about survival. When you retire, that is actually the time when you finally have the time to do the things you always wanted to do while working like travelling, following your passion or enjoying hobbies.

So, this campaign is trying to change the mindset of retirement being simply about survival to it being about doing more.

What are the three biggest opportunities for MFDs in retirement planning?

First, retirement planning is not only for a few clients, it is a need for almost every customer. Everyone is going to retire one day, so the opportunity is very wide.

Second, most people underestimate how much they will actually need for retirement. When MFDs use tools like retirement calculators, they can show the actual amount needed, which is often much higher than what clients assume. This can help increase SIP amounts or encourage clients to do SIP top-ups.

Third, many people start thinking about retirement very late, usually after they turn 45 or 50. But if MFDs can talk about retirement even to young clients in their 20s or 30s, it becomes easier to plan, and the investment required will be much lower. Plus, it gives the chance to lock in long-term SIPs.

What are the key challenges in retirement planning, and how can MFDs help their clients with these issues?

One big challenge is that people don’t calculate their actual expenses after retirement properly. And I’m not only talking about survival expenses, but also about the cost of enjoying life which includes travel, hobbies, experiences. At the same time, people often expect higher returns than they might realistically get.

This is where MFDs can really help. Their role is to explain to clients how to retire with enough not just to live, but to actually enjoy life after work. If they can communicate this properly, they can make a big difference.

MFDs usually use Excel or financial calculators that factor in inflation, future value and so on. But what important things do they usually miss in retirement planning?
The first thing they often miss is life expectancy. Today, thanks to better medical care, people are living longer than before. So, retirement could last 25–30 years or more. Many times, people end up living longer as retired individuals than they worked, and this has to be planned for.

Also, many plans only include basic expenses, not lifestyle-related ones. For example, if someone loves to travel, they may budget for what they spend today, but after retirement, they’ll have more free time and will likely travel more and spend more. That needs to be included.

Third is something we don’t typically include called “aspirational inflation.” As people get wealthier, they want to do things in a better way. For example, someone who travels in economy class now may want to travel business class after retirement. These lifestyle upgrades also need to be factored in.

Since retirement investing is long-term, there’s always a chance that clients may stop or exit midway. How can MFDs handle this situation?
That’s a very good question. First, I want to mention that SIP numbers have grown a lot over the years. But this growth has not come overnight. It is the result of years of effort and awareness.

The next step is to link SIPs with a clear purpose. Many people invest through SIPs but they don’t have a defined goal as they just chase returns without thinking about what that return will do for them.

Now, if we look at goals like education or marriage, these are emotional goals, so people take them seriously. Retirement doesn’t have that kind of emotional connection for most. But if MFDs can show how much money is actually needed to live comfortably post-retirement and how important that money is for a good lifestyle later, it creates urgency and commitment.

This kind of awareness can help clients stay invested and not stop their SIPs halfway.

In India, most people only start thinking about retirement in their 50s. The idea of ‘early start early’ doesn’t work here. So, what can be done to help this group?
Yes, that’s true. And this needs a collective effort.

One good thing is that many salaried employees already have some PF contribution from their very first salary. So, in a way, retirement planning does start early. But PF is usually only a small part of the salary.

To get more people to start retirement planning early, we need to give simple and strong examples. Like, if someone invests Rs. 10,000 every month at 12% return for 40 years, they’ll have Rs. 10 crore. For 30 years, that becomes Rs. 3 crore. And if they only invest for 10 years, like in their 50s, it becomes just Rs. 25 lakh.

When young people hear these numbers, it can really make them think. Even if we can’t convince everyone at 25, maybe some will start at 30 or 40 and not wait till 50. That’s how the shift can happen.

What are the three things MFDs should do to become better at retirement planning?
First, talk about retirement with every client, even the younger ones. Even someone in their 20s should be thinking about it.

Second, move the conversation from just return expectations to outcome-based planning. That means helping clients understand not just how much they’ll earn but what it will help them achieve. A long-term mindset helps both the client and the MFD grow.

Third, MFDs should create a sense of retirement as being fun. If we show people that they can do all the things they love after retirement if they plan well, they will feel emotionally connected to the goal. That connection can lead to larger SIP book and stronger planning.