Savings and not age should decide your retirement

Tomorrow is a big day for Rajesh. His entire family has been waiting for his retirement farewell. His office has organised a party to bid him goodbye. His beloved wife, Meeta, had been on a shopping spree for last few days. She had to look her best. It was a festive environment in his house. Both sons had arrived with their families to be part of his special day.

Still, something was constantly bothering Rajesh. He was unable to feel the excitement his better half was feeling. As it was only him, who was aware that from tomorrow onwards, he will not be having any source for earning. And in order to meet obligations towards parents, children, he had even almost emptied his provident fund.

His self-respect was stopping him to talk about this from his children, besides they had their own families to support.

The situation Rajesh is in is quite common among us. Only if we could plan appropriately and start early, we would avoid spoiling our special occasions in life with such concerns about not being able to manage even basic living expenses.

Rajesh started working at the age of 26 immediately after his graduation. He married Meeta when he was 30 and soon after they had their first son.

Life was going smooth except for few on and off financial hurdles. His provident fund helped him in those phases, but he dint bother much about his retirement life that time. Its only today he realised, it was a mistake.

Let us have a look at how Rajesh could have saved enough for his retirement:

Age: 26

Retirement Age: 58

Expected Life: 85

Current Monthly Expenses: INR 50000

Required Retirement Corpus at age 58:

INR 3.60 Crores Approx

Monthly Investment needed towards the corpus:

INR 3800

*Assuming interest rate post retirement @12% p.a.

Pre – retirement @15% p.a.

Inflation @ 6% p.a.

Expenses post retirement have been taken at 75%

Now that is an eye opener, isn't it?

By putting aside only INR 3800, you would be able to survive your retirement without having to compromise upon your pride or even standard of living.

Planning for retirement is actually a cakewalk, only trick is to take action.

Also you can use the magic of compounding in your favour if you start early. So what are you waiting for……start an SIP today. (In case concept of SIP is alien to you, keep reading….we will discuss that soon.)

Happy Retirement!!!!!