Retiring Wealthy is the most desired aspects of Retirement Planning. Thanks to the advances in modern science, the average life expectancy is continuously increasing. Changing trends show that the non-working life of an individual can be longer than his working life. While the social security systems in developed countries have evolved, the one in our country is vir tually non-existent. Joint families, which inherently provided such security, are increasingly being replaced by ‘nuclear families’. With increasingly stressful life every one wants to retire early but this requires right planning.
For a 25 year old who needs Rs.30000 per month today to run his household would require Rs. 1.28 lacs per month after 25 years if inflation is assumed at 6%. This comes to Rs.15.45 lacs per annum. Now if one assumes to earn 10% return post retirement, he needs Rs.1.55 crores just to meet his monthly household expenses.
|Monthly Expense||Rate of Inflation||No of years for retirement||Future Value|
|Rs. 30000/-||6%||25||Rs. 1.28 lacs|
You need to plan for retirement because:
Good investments are made in bad times
Risk to your returns from
NOT INVESTING in Equity
is much higher
than risk to your returns by
Investing into Equity