I get asked this question at least ONCE A WEEK, if not once a day….


There is a huge advantage in writing a book on Retirement….almost everybody who knows about the book walks up to ask :

When do you think I can retire?

The answer is so simple. I need to know the following figures of your life:

a. Your Earned Income



d. Whether your Investments will give a REAL RETURN?


Your total income is Earned income + Unearned Income.

If your expenses are > your total income, BOY, you can NEVER retire. Of course assuming that nobody else is saving for you – wealthy parents (either side!), or by some magic.

If your expenses are < your UNEARNED indexed income, YOU can retire TODAY. It is as simple.

Of course the truth lies in between these 2 extremes…..

I am now meeting a zillion kids who are saving or investing to buy a house, car, a foreign trip, buy Rashtrapati Bhavan,  but nothing towards creating an annuity or investing. I have no objection to anything like this – but I like to see unanimity between husband and wife about the strategy.

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  1. sir,
    not everybody is saving for consumption some of us ARE investing just for financial freedom. Thanks for your guidance all through 🙂

  2. Subraji,

    While I follow your blog regularly and am happy that I get to read very sensible stuff, sometime I do wonder why we lay so much emphasis on ‘when to retire’. This entire concept of earning more than what you require (very debatable point as to how much you need), and then sitting without doing any work as there is sufficient corpus is certainly not ‘our’ idea, but borrowed from the West. This naturally promotes greed and the constant urge to increase or reach that magical corpus. We certainly need to save and learn to live within our means as a thumb rule in life. I sometimes feel that many get into a paranoid mode about future, looking at the costs, inflation etc. A very important principle of life stated in the Gita (we, anglicised folks, will appreciate the great points in the Book, when the same are churned and refurbished into spectacular jargon by a management guru from the West)is that ‘even the body needs to work everyday lest it becomes wasted and uselss’ and that ‘a human-being needs to work as long as he can’.

  3. Unearned index income as– in no. of years of working life multiplied by salary and/or other incomes, adjusted for inflation?

    sorry to sound like a ignoramus!

  4. Mira, unearned indexed income is nothing but income derived other than working like dividend,income from bonds,rent etc. Basically Subra says that any one’s expense is less than 2nd Income generated from portfolio then you can retire as long as the portfolio can return beat the inflation.

    Any missing point!!!

  5. dividends and rent are reasonably well indexed in a rising economy. Bonds are not, even if they are in a bond fund. In fact in a falling interest scenario bond funds will lose part of the principal too.

    If you have trail income like mutual fund commissions, life insurance commissions, they are reasonably indexed AS LONG AS YOU WORK…after that the indexation literally stops.

  6. Hi Diwakar,

    Retiring doesn’t meaning stopping work. It simply means to do what you like without worrying about earning money. If right now, you are doing what you love to do and are able to give all your time to it, you have already retired.

    But on this blog, we are talking from financial angle not the philosophical angle.

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