When I was a kid, my mother was my tutor. She would often ask me about the chapters I find tricky. Let’s start with that chapter only, she would insist.
I hated it back then, I still hate it today. But over years, that approach became my habit. It helped.
When we do not know where is the life headed, retirement planning for obvious reasons drop to the bottom of our to-do list. But, my learning says, it should be on top of the to-do list.
Once you plan your retirement properly, other short and medium term goals fall into place.
We often say: “Abhi toh bohot time pada hai, baad mein aaram se kar lenge.”
But time flies and tomorrow never comes.
Let’s assume that you are 30, married, and living in a metropolitan city. Suppose further that your monthly expenses are Rs. 60,000 per a month and you see yourself retiring at 55, and die by 85. Here’s the money you need to accumulate if you were to live the lifestyle you are envisaging for you in the silver days:
At an inflation rate of 5% per annum, your Rs 60,000 monthly expenses today would be Rs 2,08,000 by your retirement. To earn that inflation adjusted Rs 2,08,000 per month expenses, you need a corpus of Rs 7.75 crore.
To reach a corpus, you need to invest. Suppose you are getting 12 per annum return, which is huge given the prevailing fixed deposit rates. This is what you would be needing to invest monthly today:
