I recently met a 75 year old person who was saying that a 50 year old needs about Rs. 2 crore to retire (at age 60 years), and not a figure of US $ 1 million. In fact he said that even Rs. 2 crores is too much, actually Rs. 1 crore is enough.

If I were to look at his own life, I realize that he has not accurately calculated the money that he has used in the past 15 years of his retired life.

When I say you will require 1 Million US $ for you to retire, I am making the following assumptions:

1. In retirement you will buy at least one house. At this juncture if you decide to keep your current existing house, that will require a big cash flow allocation.  http://www.subramoney.com/2014/10/buying-a-house-after-you-retire/

2. Assuming that you have medical insurance, please do remember that some of the illnesses require a lot of expenses that will NOT be covered by medical insurance cover (regular tests, supplements, vitamins, etc. ) this portion is self insured.

3. By the time you are 70 you may want to move into a simple portfolio – like bank fixed deposits or a LIC annuity pay out. Both these instruments are dull, boring, poor yielding, and taxable. So you are not likely to get a great post tax return, but these score on top in terms of simplicity.

4. Look at your own investment history. If you have a limited corpus, will it allow for mistakes.

5. The standard deviation in equity returns is so damn scary, and history is not a great guide. What if things were to go wrong?

6. Yesterday at the AIFW meet in Mumbai (1 Feb 2015) I spoke on this subject – and there were many questions on ‘what if equity goes wrong’ – sure that is a worry, but the bigger danger is in NOT BEING IN EQUITIES.

7. Remember if you retire at 55 and die at 94, inflation is a big worry. If you want to battle inflation, dementia, Parkinsons, a fall in the bathroom life is going to be tough. The greater the corpus, the greater the comfort level.

8. I asked Sundaram at the Aifw meet – and he was carrying Rs. 5000 – when he actually NEEDED NOTHING…- we carry excess cash so that ‘Just in case’ something goes wrong. So if I tell you that you require Rs. 4 crores for retirement, are you sure that you will accumulate only Rs. 4 crores? NO. We all like to keep a cushion, do we not? ‘Just in case’ kind of money.

now go to Pattu’s www.freefincal.com and see how much you need for retirement. Better still have a relaxant, and then have a look.

Take a deep breath, say a prayer, and then have a look. It helps.



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  1. sir, i laughed and cried at sametime seeing this line

    if you retire at 55 and die at 94, inflation is a big worry. If you want to battle inflation, dementia, Parkinsons, a fall in the bathroom life is going to be tough

    my grandfather went through everything you said except parkinsons and he fell in bathroom

    it was not 4 crores that helped him. it was actually his 2 daughters-in-law that took care of him all along the way including last 3 yrs bedridden totally.

    i would rather invest in my relationship sensitive index than india sensitive index

  2. i laughed and cried when I saw your comment Lakshminarayan. I hope you have 2 sons so that your 2 daughters in law take care of you, when you have no indexed pensions, your sons are going through their own medical problems (one in Australia and one in US) and happily they are able to fund your medical and other expenses. God bless. In an ideal world, the white horse flies, does it not?

  3. pooja madam i dont know your age or situation, but old age is cruel and it is even more cruel to slowly decay away all alone and feeling helpless.

    may be i come from a generation which was taught that if you want to feel rich count all the things you have that money cant buy.

    i agree one should not be totally dependent on our children esp for money and have adequate bank balance.

  4. Subra, have you come across any early retirement cases. People who have retired at 35 or 40 or 45 with x cr amount of money and are managing through interest, rent and dividend? Can you write about such cases?

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