Retirement Planning

Retirement Planning: Securing Your Future:

Retirement planning is the process of determining your retirement income goals and the actions and decisions necessary to achieve those goals. It includes identifying income sources, estimating expenses, implementing a savings program, and managing assets and risks. A well-thought-out plan ensures financial security and the ability to maintain your desired lifestyle post-retirement.

Life expectancy has increased significantly, meaning many of us will spend 20-30 years or more in retirement. Without proper planning, it can be challenging to cover expenses and maintain a comfortable standard of living during these years. Retirement planning helps you:

• Maintain financial independence.
• Cover healthcare costs.
• Pursue hobbies and dreams.
• Support your family, if needed

Life expectancy has increased significantly, meaning many of us will spend 20-30 years or more in retirement. Without proper planning, it can be challenging to cover expenses and maintain a comfortable standard of living during these years. Retirement planning helps you:

• Maintain financial independence.
• Cover healthcare costs.
• Pursue hobbies and dreams.
• Support your family, if needed

 Let's Take an Example:

Assumptions:

• Current monthly expenses: ₹50,000.
• Annual inflation rate: 6%.
• Age at retirement: 60 years.
• Life expectancy: 85 years.
• Expected investment return post-retirement: 8% per annum.

Step 1: Future Monthly Expenses at Retirement Using the formula for future value:  

Step 2: Total Retirement Corpus Needed To calculate the corpus required to sustain these expenses for 25 years:  

To accumulate ₹3.2 crores by retirement, you’ll need to start investing. Assuming an annual return of 12% during the accumulation phase:

Step 3: Monthly Investment Required So, investing ₹32,000 monthly for 20 years can help you achieve the target corpus