You did not like school, but you went for 12 years of your life. You breezed through your college but did not learn much. Depending on where you did your MBA you slogged or breezed through. Or you slogged for you CA membership.
Cut to a job. You enjoyed it. Then by 43 you did not hit the corner office. You realized that you cannot reach the corner office, and you now did not have any energy to launch a new business. At 44 you started having a fantasy. EARLY RETIREMENT.
So you want to retire at age 53?
You read Retire Rich – Invest Rs. 40 a day and were convinced that you know how much you need for retiring and you think you have the amount! Not true, think again. Use a white board, but think again and again.
There are many reasons why you should not retire early:
1. You cannot afford it: Simple if you do not have enough capital for you and your spouse to retire, you should not. Do not go by past returns etc. Put your portfolio through a stress test. Will you be able to take a 5 year hit on your equity portfolio, and a 10 year regime of ‘0’ interest rates? See what happened in the US over the past 10 years, and it is scary if you are a retiree. Retirement portfolios have to pass severe stress tests.
2. Children cost more: Your parents spent much lesser than you did (even as a %age of income). You have surely spent a couple of million rupees on their engineering and management education..and they are still paying the EMI..remember YOU are the guarantor. You thought that your children passing out of college or getting married was the end of your financial liability? No. The cruel markets are pushing children really hard, and they may come back to roost. Be ready with a few million rupees if not more. Just be ready, not saying it will happen. Some times it is your house! http://www.subramoney.com/2015/07/is-your-housing-cost-hurting-your-retirement/
3. Retiring at 53 so that you could enjoy 10-12 years and die at 65 was a good idea. However, the middle class today coolly lives into its 90s. So even if you retire at 65 chances are that you will live about 25 years in retirement. Believe me, it is a social bore. How much time can you really spend on reading the newspaper, watching television, etc. So there is no hurry to join this gang. Seriously.
4. I used to tell people that even assuming that you do not want to leave any money for your kids you should not dip into the CAPITAL before the age of 70. Now I am advising that this age should be made 75 years because of longevity, rising critical care, and inflation. See whether you can live on your INCOME permanently. That is the best solution to these 3 problems.
5. You were hoping for a part time job: Many people with an early retirement plan hope for a relaxed part time job. Sadly this may not happen. Even your building which needs a secretary wants to pay ONLY Rs. 5000 per month for your services. Your ego is hurt. Afterall in your current job you have a ctc of Rs. 35L pa. In a country where 80% of the population is under 30 years of age, there is very little chance that you will get a soul satisfying job for an older person to do.
6. Socially you will miss an office far, far quicker than you are willing to admit…http://www.subramoney.com/2015/08/get-realistic-about-retirement/
So if you think you want to retire soon, THINK AGAIN.
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