First of all promise me that you will not ASK me how I sat through a meeting which went like this:

Prospect: I will require less money after I retire.

Me: Tell me which expense of yours will go down please? Food, entertainment, doctor’s bill,….????

P: Ok How much will I require?

Me: there are no simple formulae. Try it has a retirement calculator.

P: Tell me some simple ways to calculate.

Me: Your age is 53 now, and your monthly expenses are?

P: about Rs. 70,000.

Me: does this include any EMI?

P: yes my Toyota Corolla. The Honda City that my wife and son use is now free of EMI.

Me: Can I assume that Rs. 70,000 will happen even in retirement?

P: Yes.

Me: At retirement your expenses will be Rs. 150,000 per month, simply with inflation.

P: Yes, and this does not include an occasional Foreign trip (once in 3 years cost Rs. 1 million) and an annual holiday (Rs. 100,000).

Me. May I assume that your ANNUAL EXPENSES at retirement will be about Rs. 23 lakhs?

P: Yes. Sure.

Me: You will live for about 40 years post retirement?

P: I will retire at 55 and die at 75

Me: How sure of 75?

P: I hope to die at 75.

Me: What if you live like your dad and mom…?

P: well what then?

Me: you will require 40*23 lakhs.

P: that is stress!!

Me: No. That is Rs. 10 crores.

P: My father did not need that much, you are bluffing.

Me: Your dad had very little expenses, no branded clothes, no vacations, no branded shoes,….no eating out.

P: Yes but I can afford it.

Me: You can afford it because you are NOT PAYING YOURSELF FIRST.

P: What does that mean?


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  1. ASSUME = makes ASS out of U and ME

    Classic example:
    Prospect: I will require less money after I retire.
    All other dialogues and behaviours are result of this one small assumption

    A small error in the former will produce an enormous error in the latter – Henri Poincare

  2. Not very happy to see the communication and answers given by Subra. There are lot of expenses that goes down once you reach to retirement. Let me capture few normal expense during full fledged earning cycles considering a age of 45 – 50
    Home EMI
    Insurance Endowment (Bad but unfortunately continued)
    Term Insurance
    Health Insurance
    Car EMI
    Two Kids Tuition fees
    Sr Citizen Health Insurance
    Daily House hold expense for 5 ( Husband Wife and 2 kids and one parent)

    After Retirement**************
    Health Insurance
    Daily Household expense for 4 ( Possibly the elder kids are managing his or her own expense)

    Home EMI/Insurance/Car EMI will be gone.

  3. Is it possible to have 70K expenses inclusive of Corolla EMI. Something is not gelling well. May be 70K expense is only for Corolla EMI. Is it possible for a person to have only 70K monthly expenses with two high end cars (corolla & city) in back yard and still paying EMI for one car. 8 years back I struggled to pay my Alto EMI with 75K (post tax) per month salary.

  4. Dear Subhra…

    your assumption that “Possibly the elder kids are managing his or her own expense” is very dangerous !!!!
    now a days…kids (or may is say….men) don’t settle professionally and thus financially before 35-40…
    I have seen children splurging on their fathers money till their hair turns white…..

  5. Subhra (not Subra), did you consider expenses for eating out, occasional movies, mall shopping etc.? Will stop all of these for your 30-35 years in retirement?

    how about your children’s higher education? Who funds that?
    What about their marriage? Don’t you want a BIG FAT indian wedding for them?

  6. Expenses can go up after retirement:
    1. Full day stay at home == More AC/Entertainment == More electricity bill
    2. Lunch expenses at home == Increased expenses
    3. More free time == More hobbies/outings/picnics == Increased expenses (have you taken a trip lately? did you see the hole in your wallet after that? Don’t take just the upfront Rs. xxx99/- as the whole thing…that’s just the starting point!)
    4. Old Age Medical expenses == Increased expenses
    5. Kids Marriage == Big one/two time outgo, even if they pay themselves a big part of it (In today’s world, their marriage will not happen in your working life)

    So, Net-Net, post retirement, expenses will rise, guaranteed.

  7. Met a retired Govt. college Professor (age-80), who confided that his monthly family (wife & husband) expenses was Rs.7000/-. Food Rs.3000/- & Medicine – Rs.4000/- (that was in yr 2012). All his children are well established, Scientist, Professor & Banker. Seen him riding his scooty, probably did not have a car. We should definitely think about our retirement but not so much. NB-I live in a small town.

  8. I often hear people say that post-retirement they will cut down their expenses. Impossible. That will need a significant downgrading of lifestyle to have an impact on finances (eg: move to a Tier3 town from Tier1/2 city, no more expensive restaurants, switch from fancy cars to Maruti Alto etc)

    I track my expenses by categories. I find that pre- & post-retirement, I can hardly cut down any expenses – in my case – at the most Rs.10k/year (eg: reducing expenses on hosting websites, periodicals, internet plans etc). And the ever present inflation will easily eat that up 🙁

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