When a friend said “I want to retire at 52” his wife was aghast. They are now 39 and 36 years of age and doing reasonably well. They have a young 5 year old daughter and have a good standard of living.

The wife (lets call her P) comes from a family of government servants and has always thought that you should work for 28 years so that you get a full indexed pension. To her the very thought that somebody would give up a job voluntarily -WITHOUT SEEKING ANOTHER JOB – is unbelievable. She believes that one should work till they fall dead.

He has hobbies. He likes to play tennis, he runs, cycles and enjoys a game of badminton. He was in the Junior national hockey team and has always been a sporstman. He is likely to inherit about Rs. 2 crores in equity shares apart from a house in Ahmedabad worth about Rs. 80L. That actually makes him less worried about his ‘capital’. However, his wife believes that their daughter will be growing up and spending a lot of money on her education, and other luxuruious living.

How does one reconcile the two?

First of all UNDERSTAND that as a financial planner you can only nudge. You cannot really say “early retirement is good”. This is not always true. Some men who have no hobbies or a social life should work till they drop dead. On the other hand people with some passion, hobby, a good social life should retire early and pursue their passions.

In this case the husband (let us call him R) wanted to retire and pursue some of his passions. She felt that at age 52 he would have to provide for another 50 years – what if they lived till that long? She was worried about the daughter’s education in an IVY league school costing Rs. 4 crores.

Of course he did not have that kind of money, but his mutual funds were doing well and he had an accumulated a corpus of about Rs. 3 crores. He was hoping to up it to about Rs. 10 crores by the time he was 52 from the aggressive contributions and some help from the market. His inheritance including the flat in Ahmedabad was to be the icing on the cake. His estimate was that was enough for retirement. His wife felt that they would require more money for the daughter’s education and marriage. He was willing to pay for her college education, and that she had to fund her post graduation – wherever it happened. He was willing to earmark only Rs. 2 million for her education – the mother felt that they should bear the whole thing!

I suddenly realized that retirement is not a one person decision. After all the wife should not feel threatened by the sudden lack of cash flow. Too many women feel that they are living off the capital if they have stopped earning. I feel if your dividend income is greater than your expenses, you are rocking. I do mean corporate dividends – Mutual fund dividends are a joke.

She was worried that she would have to give up “the good life” which she was not willing to. She wanted her annual vacations and a foreign vacation every 3 years if not 2. Her stay would always be in a 5 star hotel – they once turned down a vacation because there was no 5 star hotel in that location. Her last foreign trip cost them Rs. 13 lakhs – for the 3 of them – and he was not happy with that. She wanted more such trips.

She was not earning anything at all – and he felt that she could contribute enough at least for the kid’s luxury education and the luxury vacation. Stress.

When I started talking to them I realized that he had a long way to go before he thought retirement 🙂

Is your FAMILY ready for YOUR retirement?