Most people in service take their retirement planning too lightly and think there is nothing to worry. I hope so.
I see 40-50-60 year olds still joke about retirement, and this I think comes from the following:
1. My parents never worried so much: Sure if they had 4-5 kids, their retirement was always Total Requirement /5 and that was manageable. Also they needed a ‘shoe’ not a ‘Nike’. They needed food, not branded food….so their requirements were less.
2. Their real estate appreciated and they rode the boom: For people who bought a house in one of the cities in the 1960s, 70s, even 1990s – their properties HAVE APPRECIATED. However if the price remains same or actually falls (see the banking data) YOU will not have an appreciated asset waiting for you at the end of life. You will have to create it.
3. The average age of people dying is going up – even though we do hear of many people dying in their 50s – look around you, and you will find many people in their 80s and 90s.
Also the amount that people think that they require for retirement is completely off the mark. Remember if your reflexes slow down, by the age of 75 you may want to keep all the money in bank deposits. This will mean about 12-15 years of NEGATIVE REAL RETURNs AND inflation. Hey your corpus better be 35 times your annual expenses at age 60.
So if your annual expenses at age 50 is Rs. 500,000 pa, assuming it doubles in 10 years, it will be Rs. 10,00,000 when you are 60.
So 35*10,00,000 = 3.5 crs. Rs. + a house + some amounts necessary to replace assets like TV, fridge, washing machine….etc.
Here read on:
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