How to plan for longevity risk in retirement

Most people, when they plan for their retirement, they look at the average life expectancy and then assume that's the age they will probably live to. However, averages can be misleading because they conceal the variation of people who do not live to the average life expectancy mark or live past it. When you are making your retirement assumptions, it's always better to be overprepared and save more with the assumption that you might live to be 100 years old or more. It's not really hypothetical because science is getting better all the time. In 1960, the average Indian life expectancy was 40 years, and in 2020 it was 70 years old. Not planning for a long life is called "longevity risk," and most people don't intuitively think about it.
So what does this mean in investing terms? You will have to have a higher equity exposure because equities in the long run have higher expected returns compared to all the other asset classes like debt, real estate, and gold. But this leads to questions like: what stocks, how to pick them, etc.
But there's a much simpler, tax-efficient, evidence-backed, and historically proven way of investing in equities for the long run. In this video, Karthik explains how to think about longevity risk and how to invest to cover that risk.
Of course, retirement is just one broader topic under personal finance. In case you didn't know, we have a dedicated module on personal finance on Varsity: zerodha.com/varsity/module/pe...

[@Super.normalkid]

I appriciate the fact that you shared that KR market moment with us. It hit me to think life and purpose in a new way.

[@saurendraprasad]

The Example of Old Lady from KR Market is Mind Blowing !!

[@darkPassenger24]

Excellent as always Varsity should be a book for kids in school from class 3rd onwards

[@harshithm.rharshithmuddaka8289]

Thank you karthik sir for providing free knowledge

[@sujeshkc5599]

Good story Karthik. Thank you for sharing

[@kartickdas7009]

Thank you sir for your valuable advice.

[@RaviKrishnaSrivastava]

Great video. Thank you for sharing these insights.

[@harishkumarg7395]

One of the most useful video if we can follow the same our financial position would be better what we expected. Thank you @karthik rangappa

[@traptigupta2179]

Sir sir sir 😍 me kab se aapki books parna chaha rahi dhi but bahut try ke baad bhi nahi ho raha dha But aapko KZbin pe dhekh ke dil kush ho gaya I really happy to see you in vedio I don't know you already made sach types vedio I am late but is ok 😍😍😍 der aaye dorost aaye I really love your knowledge and experience I wish I become sach personality like you I am one of your big fan

[@sabarigirinathanm9838]

Great content, keep up the good work guys

[@prabhakarholikatti3771]

Wow .. excellent video.. brilliant explanation .. thanks sir

[@akshat_djjoshi8264]

Thank you Zerodha and Team, I believe in you. We all do. The content touch my heart. Keep rising and shining zerodha!

[@PraveenKumar-hr6gi]

I like the way you explain things

[@truecaller9273]

Great video and awesome insight

[@kirenrana]

Thankyou for your thoughts but the thing is everyone knows the basics so which index is good! Share that too..

[@vikrantnalawade4988]

Sir your simply wonderful...... Thank you so much... 🎉🎉🎉🎉🎉

[@pushkarnyayadhish3068]

Great content & many lessons to learn from video

[@pankajd2454]

Thank you Karthik sir

[@iamjavedji]

bhai sahab is baar mast video banaya apne...

[@AvishekBasu42]

A small chunk of money can be put in some good stocks also in SIP mode for hyper-long investment purpose?

[@amithathakur363]

Good one.Especially to plan for 100,👍

[@manojkumart.k7749]

Superb..... thank you

[@chitranjanchaudhary7823]

Excellent presentation

[@satishrana9735]

Very useful ❤

[@MsSumandas]

Refreshing

[@rahullrij]

Does it mean that it's a bad idea to invest in index for medium term goals like 5-10 years?

[@saurabhmoon5312]

Can you compare the NPS VS Index Fund ( If someone has an investment in NPS for their retirement, then whether they should invest in the Index Fund ?)

[@aishwaryakarthik7909]

HI Sir, I would like to ask a major doubt i could'nt get the answer anywhere. I am 28 years old planning to invest for my retirement. In order to have a good asset diversification i have 15% allocated to debt for 25 years . Then slowly increasing to 100% for my retirement . My question here is in which debt fund should i invest at my starting stage(for that 15%) for long term debt investment.

[@alliswellmuthukumar7799]

LIFE lessons

[@investwalebhaiya]

Wow

[@rajaneeshbhat189]

Sir what if we invest in physical gold like bars or coins as a hyper longterm investment

[@akshatprakash871]

The returns are poor, gold bars don't give any yield. There is no cash flow associated with gold bars. They stay stable for most of the time and only double in times of crisis. Infact in more financially developed economies, they do not even work as a very good hedge. Plus you have to pay taxes on the capital gains other wise spending that money is also a huge pain. If you still want to buy gold, buy sovereign gold bond. Atleast they give some interest.

[@vijayjaladi2097]

❤️

[@truthfighter1033]

🙏

[@sagarhalder98]

Why these videos don't get million views???

[@drspg358]

I love you All Varsity Team ❤❤❤

[@surajkumar-kp8eo]

🙏🙏🙏😊

[@praddyumnadurge9341]

❤️🙌