How the hell am I supposed to answer this question?

This is a little old names but the figures are more or less accurate. A young couple was meeting me for the first time perhaps and we were discussing their finances, how much they had invested, how it had grown, etc. etc. and I met them recently once more.

Background: they are a young couple who like to describe themselves as ‘upper middle class’ but technically they are in the really rich class as far as income is concerned, and in the upper class as far as balance sheet size goes. Both H and Wife are bankers and earn very well, and are reasonably confident of keeping their jobs till the age of 55, at which age they hope to retire.

Currently they have a net worth of Rs. 6 crores, and one spare flat in upmarket Mumbai. Real Mumbai not the extended suburbs!!

So his asking me ‘is this 1 Million US $ really sufficient for me to retire?’. At age 46 for him and 39 (childhood neighbors, arranged marriage, same caste, different language).

I was hit hard by the question..and had to tell him the following…

  • You are doing very well in life, your portfolio is doing well
  • You have a son and twin daughters, you need money for their education
  • Both of you are single kids and both parents have very little of own ‘cash flow’
  • Your extended family keeps touching you for ‘small amounts’ of money for ‘small things’
  • Your SIPs were started in 2004 so you got the full benefit of the boom, so you could take the fall in the markets
  • Going forward the equity returns may be a few points lower
  • Even assuming that ALL THIS money was just for retirement it would not be enough
  • Assuming some kind of a foreign education for all your 3 kids, we are talking of about Rs. 6 crores for higher education
  • Your children are still very young and undecided on what to do. Career choices will decide how much you need
  • Both your parents are young, so please provide for their Long Term Care expenses. I have no clue how much.
  • Be ready for a real long life for your parents and for yourself
  • I know you are confident about your jobs, but we all know it is the economy, stupid.
  • You are staying in a nice 3 bhk and drive nice cars, but if your parents were to move in with you, you will need more space!
  • Your annual expenses are about Rs. 40 lakhs including school fees, and servants expenses, I do not see it going down
  • Your children imitate your life style too so your expenses are likely to explode
  • Yes you are rich, but not wealthy
  • If one of you lose your job, you will struggle
  • Last month your grandmother broke her hip bone and you spent close to Rs. 7 Lakhs to set it right

I could have gone on and on..but the truth is ‘how much you need for retirement is something which only YOU can answer….not me. I have no clue about your potential explosive expenses!!


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  1. After reading this you don’t know how poor I am feeling Subra…
    40 lakh annual expense…OMG…If I have this amount in my saving a/c..I’ll go to my village and will happily live there after for atleast whole of my life…with my parents… wife… brother…
    How much should I have to ?? i dont know…could you help…frustrated with the current job…i m in almost completed 10 yrs…having 7 L per year annual expenses…

  2. Subra sir,
    What is your definition of middle class, upper middle class, rich and wealthy in india.
    An article on this may help.

  3. नानक दुखिया सब संसार। But yes Subra is right to point to reality. Expenses disproportionate to normal may be lead to hard times in hindsight.

  4. ninad,

    that’s because 1.4 billion people (Chinese population) can’t count their house as part of their net worth

  5. moment anybody asks is this enough means they know deep down it is not enough
    they just need somebody consoling saying it is enough

    a satisfied person will not ask this question

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