Kabira Speaks: Safety Is No Less Risky

If you ask most investors in India about their preferred investment avenues, the answers are predictable:

"I only invest in fixed deposits, real estate for rental income, postal schemes, and gold or gold jewellery — because these are safe"

This belief is so ingrained that many don’t stop to question it. After all, these instruments have been around for decades, your parents probably relied on them, and they give you the peace of mind that your money isn’t "at risk".

But here’s the uncomfortable truth: what we call ‘safe’ today may be dangerously unsafe tomorrow — especially when we talk about retirement planning.

Let’s look at a very realistic scenario.

Suppose you are 58, living with your spouse in your own house, debt-free, and with the satisfaction that you’ve managed to educate your children and help them settle. Your retirement corpus is Rs 2 crore — a seemingly solid amount.

Your current monthly expenses are Rs 75,000. Your investments are in “safe” options earning an annualised 6.5%, and inflation is a moderate 5% per year.

How long will your money last?

Answer: About 26 years.

At first glance, 26 years might sound fine — but if you and your spouse live well into your 90s, which is becoming more common, your corpus will run dry while you’re still alive. And that’s not even factoring in unexpected medical emergencies or helping children/grandchildren in times of need.

So, what you thought was “safe” is actually a ticking clock, counting down to the day when you run out of money. Outliving your corpus is no less risky than any market volatility.

The most ignored financial goal among Indians is retirement. The reason is partly historical.

Our parents and grandparents often had pensions or government jobs, which provided a lifelong income. Many of today’s retirees you see around you are not heavily dependent on their children — but that is changing fast.

Corporate pensions are disappearing. The gig economy is growing. Early retirements — voluntary or otherwise — are becoming common. People in their late 40s and early 50s could find themselves out of the workforce, with another 30–40 years to fund on their own.

On top of that, medical inflation is running far higher than regular inflation. A hospital bill that costs Rs 5 lakh today could easily cost Rs 15–20 lakh in 15 years. Without adequate planning, such expenses can cripple even a “safe” retirement plan.

And remember: you can get a loan for education, for a house, or even for a wedding — but no bank will give you a loan to fund your retirement.

Kabir put it well: “Being dependent on others is equal to dying — if not physically, then mentally.”

Consider two friends — let’s call them A and B — who both start investing Rs 10,000 per month at the age of 25.

• A invests in an equity mutual fund earning 12% p.a. He invests for 15 years, until age 40, and then stops. At that point, his investment is worth ₹50 lakh. He leaves it untouched, and by age 55, it grows to Rs 3 crore.

• B opts for a “safe” investment at 8.5% p.a. and invests diligently for 30 years, until age 55. His corpus? Rs 63 lakh.

Same monthly investment, but vastly different outcomes — because of the compounding power of equity.

It’s not that equity doesn’t carry risk — it does. Markets can be volatile in the short term. But avoiding equity altogether carries an even bigger risk: the near certainty of your money losing value against inflation over decades.

The true danger isn’t a market correction — it’s waking up at 75 and realising your “safe” corpus is gone while life is still ahead of you.

That’s why it’s essential to work with a financial advisor, assess risks objectively, and build a portfolio that balances safety with growth potential.

Because in the end, safety without sustainability is no safety at all.