• Arpita Gupta

Busting Myth: Your Monthly pension, in some years, may not be sufficient (Villain: Inflation)

Must Read for Retirees with Pension Income

Most of the Veteran community we're in touch with, are shocked to know this fact "In some years, your expenses may exceed your monthly pension income"

Here's why?

(Assuming the current status of OROP being not implemented)

Monthly Cash Inflows (Pension)

1. Your Basic Pension is NOT increasing

2. Only the DA part (17%) is increasing by 3-4% every 6 months (that is 6-7% every year)

That is, of your monthly inflows, only the 17% portion is increasing by 6-7% every year

Monthly Cash Outflows (Expenses)

On the other hand, your FULL expenses are increasing (due to inflation) by 7-8% every year.

And hence, after a few years, there is a very high probability that you will start falling short of your pension

What should you do?

1. Do a cash flow analysis of your monthly income & expenses - from your current age to your life expectancy (example 85 yrs).

2. Analyse whether/ not you will start falling short of your income to MAINTAIN the current standard of living.

3. If yes, allocate a portion of the lumpsum proceeds you received to your Retirement Goal (because, there's no backup plan and there's nothing called a retirement goal!).


In the above case, even though the veteran managed to save some money in his initial years, from the 8th year onwards, he started facing a cash shortfall!

Above exercise is extremely important and hence, we suggest, sit with a financial advisor, estimate your cash flows and calculate

1. Do you need to allocate some money towards retirement?

2. If yes, how much?

3. And where should you invest it, so you can access it without ease in your later years.

- Team Nivesh Mitr

Your Personal Financial Advisor


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