While it is economically beneficial to stay in a senior living community, it is important to plan the right investments. The key message that I would like to share with senior citizens is that they need to create a stream of guaranteed income.
One of the best ways to create a guaranteed income stream is to own property and lease the property to earn a rental yield. In case of multiple assets, the rental income is higher. In fact, many seniors lease out their residences and move into a senior care community. Since rents increase every year, this form of income also helps stay ahead of inflation. So, it is prudent to invest in property when we are younger and create a steady and guaranteed income stream.
Another way of creating an income stream from property is to opt for reverse mortgage. Reverse mortgage is not very popular in India. However, it is a good solution for creating an income stream.
It is also prudent to invest in mutual funds. These investments have higher liquidity and allow the investor to earn a steady income. They carry lesser risks than investing in the primary market and yet offer good returns on investment.
In addition, seniors should invest in pension funds and saving schemes. Though these investment options are low risk and help them preserve their capital, they also offer much lower returns.
There is a growing belief among a section of seniors that they do not need to retire. After all, many of them are professionals such as doctors, bankers, lawyers, chartered accountants, financial advisors, creative consultants or technology professionals at the peak of their prowess. Their skills are in high demand.
They have expertise in a particular field and influence in society. These Golden Agers are poised to start new careers, businesses, philanthropic activities and will create significant economic value, well into their late 70s. And they are doing this at the peak of their expertise and influence. In addition, they are operating in the gig economy that allows them to find assignments and create value.
And this demographic dividend will have scale. By 2050, we will have more people in the 60s than the population of most countries. Currently, our population of people above the age of 60 is catching up with the population of Mexico (130 million) or Russia (143 million). By 2050, our population of elderly will be close to the total population of USA (326 million).
Seniors who stay employed till the age of 75 (and many of them do), add at least 15 more years of income, savings and investments to their lives. We have to acknowledge the demographic dividend that this cohort is creating for the economy. They will earn better, live better, be happier and be more productive.
It is evident that these golden agers will demand a new way of living. They would need a support structure around them to enable them to be productive and creative and senior living communities are the preferred solution.
One of the best ways to stay financially secure and independent as a senior is to continue to work, earn and stay relevant.
According to CII, census updates and secondary research, senior housing demand from urban and rural sector is about 3 lakh units. Current supply of senior housing is about 20000 units only. Out of this only 10000 units are operational. At present the industry is estimated at Rs 9180 crore. With the population of seniors poised to grow to 300 million, there is a huge mismatch in supply and demand.
In the near future, senior living solutions will be integrated into most mixed-use developments and townships. Communities will be redesigned to cater to seniors. This will accelerate the scale of the category, to address the huge mismatch in demand and supply.
