When the Nest Grows Cold: Why Retirement Financial Planning Must Begin Before It’s Too Late

In the suburbs of Nugegoda, Mrs. Shanthi Perera once lived a vibrant life. A retired schoolteacher, she had raised three children, funded their overseas education, and even helped them with down payments on their first homes. She never imagined she’d be spending her twilight years alone, depending on neighbours for meals and struggling to afford her medication. Her pension, meagre but sufficient at one time, was diverted by her eldest son, who had power of attorney. He insisted it was for her “safety and convenience.” It wasn’t long before her savings were emptied to fund his lifestyle. When her house was mortgaged without her knowledge, she was forced out.

Mrs. Perera isn’t alone.In Kurunegala, 

Mr. Seneviratne trusted his long-time driver to manage his bank withdrawals. What he didn’t realize was that his entire fixed deposit had been prematurely withdrawn and moved into an account the driver controlled. By the time his children returned from overseas to intervene, the money was gone.

And then there’s Mrs. Rathnayake from Kandy. She did everything “right”: a government job and a savings fund. But what she hadn’t prepared for was the rising cost of living and an unexpected illness that wiped out her savings within a year.

These stories are not isolated. They reflect a growing crisis of elderly financial insecurity in Sri Lanka. The statistics are stark: over 13.5% of Sri Lanka’s population is now aged 60 and above, and this is expected to rise to 22% by 2037. Sri Lanka is ageing faster than most South Asian countries. Yet, retirement planning remains entirely underdeveloped.

A majority of Sri Lankans retire without a structured financial plan. Many rely solely on EPF/ETF balances or assume their children will care for them. However, the average EPF payout after a 30-year career is just around Rs. 1.5 to 2 million a sum that would barely last five years considering healthcare, food, and rent. More alarmingly, financial abuse of the elderly is on the rise. A 2021 study in Sri Lanka reported that one in four elderly persons has experienced some form of financial manipulation usually by a family member.

This is why financial planning, particularly after the age of 40, becomes critical. By 40, most individuals have completed their major life investments education, home ownership, children’s schooling and are entering their highest-earning years. It is the ideal point to shift focus from accumulation to preservation and security. Yet, many postpone this until retirement is imminent, by which time options are limited and risks higher. Planning after 40 allows individuals to diversify income, create passive streams, and most importantly structure their finances to resist external manipulation.

A crucial aspect of retirement planning is ensuring that funds cannot be misused even by well-meaning loved ones. In Sri Lanka, bank accounts and deposits can often be accessed by those with power of attorney or joint mandates, and legal recourse is slow when abuse occurs. Therefore, we must move towards solutions that embed structural financial safety. What’s needed are products and frameworks that lock in income flows and protect capital from both external threats and emotional decisions.

Many countries offer models like irrevocable trusts and spendthrift trusts to protect retirement funds. These trusts provide fixed monthly distributions to the retiree, but the principal cannot be withdrawn even by the retiree themselves. Upon death, the funds pass to beneficiaries. In the United Kingdom and Canada, pension products with annuitized benefits ensure retirees receive a guaranteed sum for life, regardless of market conditions or personal decisions. These structures are designed not only to provide for the individual but to insulate their financial independence from potential abuse.

Sri Lanka currently lacks equivalent instruments. Our financial system remains overly reliant on unprotected savings, informal arrangements, and public sector pensions. There is a growing need for regulated retirement trusts, annuity products with capital protection, and legally binding mandates that cannot be overridden without court oversight/intervention. Financial institutions must innovate, and regulators must create enabling laws that prioritize elderly protection.

For individuals over 40, the message is clear: the time to act is now. Begin by assessing your net assets and categorizing your savings into essential (non-negotiable) and discretionary (flexible). Explore options for fixed-income investments that are inflation-adjusted. Speak to a financial planner or lawyer about creating a personal trust or establishing standing instructions that limit access to funds. Above all, have open, honest conversations with your family define boundaries, assign responsibilities, and communicate your expectations for care and autonomy.

Old age should not be a season of financial fear. It should be a time of rest, dignity, and independence. Without proper retirement planning, however, even the most stable lives can unravel quickly. The cases above are not tragedies of fate; they are warnings and they should compel us all to secure our futures before the nest grows cold.

The writer, Nimanga Shehan Senanayake is a Director of Corporate Capital Market Limited (capm.lk). CAPM is a specialized financial intermediary providing tailored advisory in Investment, Wealth Management, Real Estate and the Client Education & Financial Literacy Programs Focused on bridging the market gaps.