One Reader named Rajeev had put this in the comment column and had addressed to another reader Siddhant. Since all of you may not be reading the Comments column, reproducing it here. Not a word has been changed…
I went through similar disbelief a few years ago. Then I used my excel skills to create a simple worksheet. As I am nearing the retirement age, it helps project more correctly what will be your running cost after retirement. Rajeev happy to put your excel sheet also if you do not mind sharing…
The net funds you require as savings after retirement is indeed in crores of rupees. Just do the math and take all factors into consideration.
Present monthly expenses
Annual savings till retirement
Present savings value
Expected returns on savings till retirement
Expected return on savings after retirement
% of present income you will need after retirement. (This will rise not reduce after retirement, due to extra travel / medical)
Any extraordinary expenses left over – Children’s marriage / house etc
Loans to be repaid before retirement
Expected Income tax rate
The calculations showed that you are safe only if you can get returns that are higher than inflation even after retirement. This means having equity exposure till you die.
Being scared of the figure will not help. The earlier you start, ther better prepared you will be.
Life expectancy is rising in India too due to better medical care / awareness about health issues . This adds to the problems. Ladies outlive their husbands very often. One has to take care that your partner understands the planning and supports the same.
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