What is so scary about retirement? The big worry that you will run out of money before you die. Rather you OUTLIVING your money.
Is it a fear? I think it is a nightmare especially for those who do not have assets which they are NOT USING, children not doing well, and those women who have lost their husbands when they are young – say around 45 years of age and HAVE NO INVESTMENT SKILLS at all.
Your retirement mathematics needs the following:
1. At what age will you retire (you do not know)
2. How much will you be able to invest regularly from now till retirement (you do not know)
3. With all your resources at what rate will this investment grow (no clue!)
4. Going from point no. 3 – how much will your retirement corpus be (function of points 2 and 3 above)
5. How much will be the post retirement inflation be (no clue)
6. What will be the withdrawal rate at which you will withdraw (depends on your needs and inflation)
7. At what rate will your Investment portfolio grow. This again is a function of how your stomach will perform when equities tank, real estate stagnates, interest rates fall and your hospital bills are only paid partially by the insurance company.
8. Given the uncertainties of how long you will live, how long will your spouse live, whether your children will support you (or will they need it) any number that you estimate is a guess. Complete guess work.
When you use Pattu’s retirement calculator please remember the above 9 points. Just a suggestion.
Even better start on a whiteboard. Will save you effort.
Post Footer automatically generated by Add Post Footer Plugin for wordpress.