Ten years ago when I use to meet clients, everyone wanted to retire soon. Maybe I was in the company of worked up guys. But many of these changed their views and now everyone wants to work till they can. Not because they want to be active, but because they have nothing as Retirement Goal. Most of us realize the importance but we do not progress. The main reason – NO CLEAR DIRECTION. The question – how much money enough to retire in India … haunts most Indians.
We will reveal the calculation below as all know it but few visualize & implement it.
We all know longevity is increasing, medical facilities are evolving with new developments but the certainty of income is decreasing and so is the concept of “guaranteed returns” or a predefined retirement amounts.
Actuarial studies (guys who study your chance of dying or living in various conditions) have shown that if men cross the age of 65 there is 49% chance that he will live up to 86 years of age.
And if he reaches 86 there is 26% chances that he will reach the age of 92.
This means 32 years! To survive or live on retirement kitty. This is when you retire at 60. Earlier retirement means more expenses per year of life.
How many people want to work for 32 years to fund the next 32 years?
How much money enough to retire in India?
I will straight away tell you how much. But calculation can only be done by qualified people. But you should know what is required?
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This image may look easy, but it’s the dynamic life that makes it difficult. That thing to SERIOUSLY START comes with great difficulty & often late.
Changing income, expenses & inflation keeps the goal post moving. You really have to be a nut to score goals.
What is Joke in Retirement Planning
- When a ULIP/Insurance policy/Scheme advertisement runs on TV with a story of you as facing difficulties during retirement years.
- When a ULIP/Insurance policy/Scheme advertisement runs on TV with a story of you as a proud person not dependent on anybody.
Something which gives you a solution without hearing your problem is never a SOLUTION. It is a free, luring communication paid to emotionally imbalance you.
Retirement Planning is individual and customised. One Medicine for ALL does not work here.
Some factors which have a direct impact on retirement investing:
It’s a fact of life: the market goes up, the market goes down – because you are watching it daily.
Though it’s reassuring to pull out due to panic during a down market, it could cost you in the long run.
No matter what stage of life you’re in, a properly diversified portfolio can be your best defense against market volatility.
The second strategy to make most out of markets and eliminate emotion- create an asset and product allocation strategy to manage risk.
Longevity of life, wants & second innings
As life expectancy increase so does the risk of outliving your retirement assets. In addition, inflation will make life in retirement more expensive in years to come.
Even a modest 4% increase in the annual inflation rate means living costs will double in just 18 years. You need a realistic calculation of inflation for each goal during and before retirement. This is the most complex part of the puzzle.
Taxes & Costs related to Investments
You want to keep as much of your hard-earned savings as possible. But sorry … The country needs it share in form of taxes.
People managing your portfolio are in the business of providing services. They want to grow profitable just like you.
You have to manage your assets that’s both tax efficient and low cost. Because all these savings make your job easier and goals reach faster.
Health Care – Your own financed
Medical costs are rising even faster than the rate of inflation, and few government departments are offering health care coverage for retirees. Private employees are on their own already.
Most of us make mistakes on relying on the employer-provided cover. Maybe it works when you are young but retirement cannot depend on stringent mediclaim policies.
There is a gap in what policies provide and the treatment sometimes is required or desired. You have to make a corpus for health management only.
Unexpected Events & Addition of Goals
Life can be unpredictable. Ask a father of a martyred soldier. He again becomes the son of the house when he should enjoy being a father.
Point is you cannot just be looking at a bare minimum. You may have to extend the financial responsibility.
The best way is to include that “extra” money so that plan is prepared to handle unforeseen events. This can give you peace of mind that you’re prepared for the retirement you’ve envisioned.
The only aim of writing this piece is to break the last shackles if you find yourself tied up wanting to find the answer to – How much money enough to retire in India? Google & Quora will not help as it is in your hand to move ahead with it.
Hope you liked this article & now have answer to how much money enough to retire in India ? I will wait for your view in the comments section. Do forward to your family and friends so that benefit is gained by all.