Retirement: Food costs!

The second step in retirement planning is to compare the Income and Expenses.

Of course there are 3 possibilities:
Expenses = Income
Expenses > Income
Expenses < Income

Without getting into any relative terms, situation 1 and 2 are close to disaster. Also remember if expenses are only slightly lesser than income, the demon called inflation will quickly move you from the 3rd category to the other categories quickly.

So you are ‘comfortable’ only if your income is far higher than your expenses.

If your expenses are high (a matter of fact, not of opinion) you need to reduce expenses dramatically. How expensive is life after all?

Simple let us say you have 3 meals a day and each meal on an average costs about Rs. 75 (frankly at McDonalds it will cost you Rs. 90 for a breakfast and Rs. 125 for a meal – totaling Rs. 340 a day!). Your food cost per person per day is Rs. 225 (75×3)

Your food costs are Rs. 225 x 30 days x 12 months x 25 years = Rs.  20,25,000 per person in retirement. Just food costs for you and your spouse is Rs. 40 lakhs. This, after ignoring inflation!

those of you in anger mode and denial mode, I welcome your brickbats!

Related Articles:

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

7 Responses to “Retirement: Food costs!”

  1. well said subra,
    reality doesent vanish by mearly closing eyes

  2. can you please suggest me some good index fund with very low expenses

  3. I run the site BankVibe.com and was wondering if you would be interested in exchanging links. Let me know either way. Thanks!

    Dan
    BankVibe

  4. “Also remember if expenses are only slightly higher than income, the demon called inflation will quickly move you from the 3rd category to the other categories quickly.”
    Should it be re-worded as
    “Also remember if expenses are only slightly LOWER than income, the demon called inflation will quickly move you from the 3rd category to the other categories quickly.”

  5. Thanks Param change made.

  6. to manmohan – question posted in irrelevant area…
    nevertheless, i would recommend Franklin India Index Fund – Nifty or Sensex – they charge 1% consistently (other players that show .5% or .75% are unable to maintain it) & tracking error is low at 1%. not the best, but the better options among the lousy ones.
    if you can afford ETF though, NiftyBEES is best – cheapest & low tracking error

  7. Really an eye opener

Leave a Reply

This blog is kept spam free by WP-SpamFree.