Retirement Planning

Let us discuss a Retirement Planning case in this post.

Current Age: 35 Years

Retirement Age: 55 Years

Inflation : 8% p.a.

Current Monthly Expenses: 1,00,000/-

Life Expectancy: 80 Years

Rate of Return: 12% p.a.

Retirement is a new way of life in many ways. Apart from adjusting your work life, you also need to adjust your financial life to the new reality. Here’s what you need to do to build your retirement corpus, if your current monthly expenses are Rs.1,00,000/-, and you expect to retire in the next 20 years.

If you consider the rate of inflation at 8 % p.a., you will need to build a retirement kitty of Rs. 9,35,18,569/- (Rs. 9.35 Crore) to live comfortably. 

You will need to invest a lump sum of Rs. 96,94,767/-  or invest Rs. 94,534 each month, at an annual return of 12 %, in order to enjoy your golden years.

For getting 12% p.a. return, you will have to invest in Equity Asset Class. 
A balanced portfolio can also achieve this goal.

The only problem which can occur post retirement is you will still have to keep allocation in Equity Asset Class. If you do not want to do that post retirement the investment amounts and retirement corpus amount  will change drastically.