Financial planners, mutual fund sellers, bank RMs, all of them have a knack of racking up a large number when it comes to your retirement corpus!

Normally they do this so that they can galvanize the client to act. However, from what I have seen it normally has a negative effect! When people look at a huge number – say Rs. 5 crores – the immediate thought is “Oh, my God!” I cannot do anything about this!

However this is not true, nor desirable. You as a customer (client) should understand that this is a nice round figure, but if you do reach Rs. 4 crores, it is not the end of the world. Also you need to understand that if you start to save, say 30 years in advance, you may need to invest only Rs. 80 a day to reach there. However if you start 5 years before retirement, you may need much, much, much more – say Rs. 6 Lakhs a month (or Rs. 20,000 a day!!).

So instead of killing your adviser, start, albeit with a small amount. Starting is more important than the amount with which you start. It is like getting a root canal treatment done – do not try doing 12 teeth at a time!

Far more importantly the inflation figure today is about 10-15% p.a. for many of our expenses. From where Financial Planners take this figure of 8% is not easy to understand. However if you do take a figure of 15% inflation for 20 years it will scare the hell out of you. And in an internationally competitive economy, salaries may not go up at that rate. So what are one’s options?

I am here just to ask questions – all of us need to find out our own answers for these complicated questions.

A simple lifestyle, low level of expenses, better understanding of health, wealth, and basic finances are a nice step in that direction. One illness (say blood pressure or diabetes) detected at age 42yrs can cost you about Rs. 55 lakhs over your remaining lifetime.

So not understanding EXACTLY how much you need for retirement is fine, but, however, taking steps to improve health, reduce weight and blood pressure, sugar, stress, improve flexibility of mind and body, AND investing for retirement is something that YOU HAVE TO DO. The money will take care of itself. Honestly.

Related Articles:

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

  1. What I like about India is you can scale down your lifestyle if someone is faced with cut in salary, job loss or even retirement fund.

    During my trip to India each for the last 5 years, I realized that taxi fares did not go up. I am not talking about ‘Meru’ or others within the city. We took total of 20 trips from small town to big city and paid the same amount as that we paid 5 years ago. Infact we roamed in better vehicle VISTA against INDICO paying the same price.

    The airline prices did not change as that of 5 years. We make 3 trips between Hyd to Blr each year and paid the same price in the last 5 years. Even the introduction of some new train (Ghareeb Rath), the AC fares became verymuch affordable between these two cities.

    We go for health check-up and am surprised that new hospital with five star facilities which opened up near my home charged cheaper price compared to its competitors. Blame it on competition.

    If going gets tough and faced with short of money, the public in India have too many choices like Flight, Train, Buses, AC and Non-AC and so on. This is not true if you are in abroad. Restaurents also it is the same and so as Garments. Increased competition and too many choices, makes the life affordable to all which makes the India great.

  2. Depends upon which class of consumers this article is addressed to.
    Seems to be UMC. For Middle/LMC and below, costs for food, clothing and shelter, transport, health care and education have risen considerably during last 3 years. They have to cut down heavily on quality. Diet without tomatoes/fruits/onions as our grandfathers used to eat during world wars time.
    However the great Indian housewives are inventing garib nawaz receipes depending upon prices of food items, altering clothes etc. We should salute them.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>