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Old 4th August 2018, 21:48   #31
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Very interesting thread! I have little over a year to retire at 60, and am still contemplating whether to work after that, as my company is indeed interested in my services. I'll take a call based on my health, which so far (touch wood), has been great, except neck pain.

Out of my 37 years of work life so far, I've worked 21 in SAIL management cadre and the rest in IT ERP world. I did have a break of a year when I opted for a VR package a couple of years ago. But my savings are modest, as our salaries in PSUs were not great till the 5th pay commission. Therefore, the maximum corpus one could dream of was 2 crores, and less if you invested in property. I did invest in my flat, so therefore my corpus will be a little over 1.2 crores next year. I have not major investments, except daughter's wedding, but luckily we don't have dowry in our community.

My plan is to invest it in mutual funds (mix of equity and debt funds), and withdraw around 5 % every year. This would take me till age 80, if I live that long. In case I do, and will be in dire need of money, I always have the option of selling my flat. Currently I can sell if off for 1 crore, though I bought it for 53 lakhs 12 years ago.

Though the idea of retirement savings is good, the challenges with younger generation (which I luckily escaped for the most part) is spiraling school/ college fees. Add to that the desire for newer and larger cars. Travel to international destinations is another thing we never dreamed of 2 decades ago.

Therefore I am not sure how much of planning will help when costs like the above cannot be predicted in the future.Moreover one must be well-healed to save 5 crores in the next decade. Perhaps feasible only for senior IT guys or other specialists drawing more than 50 lakhs CTC.

However I wish you guys the best.
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Old 4th August 2018, 22:13   #32
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I don't get how a 5 Crore corpus is
Quote:
strictly middle-class
. When our family of 4 stayed together (no kids) in the city, with apartment paid off, our monthly expenses including everything was around 18-20K per month.

I'm curious to see what kind of lifestyles some of you "middle-class" folk here have.

I'm looking to FIRE myself and my goal is to not FIRE as a rich-man, but to have enough to sustain the family reasonably well. We may continue to work but will no longer have to work jobs that we don't desire or like.

You need to be frugal in order to maximise FIRE.
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Old 4th August 2018, 22:21   #33
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Originally Posted by vnabhi View Post
Very interesting thread! I have little over a year to retire at 60, and am still contemplating whether to work after that, as my company is indeed interested in my services. I'll take a call based on my health, which so far (touch wood), has been great, except neck pain.
If you like your job and if your health permits, you should take up the offer. A relative of mine retired from bank and almost died of boredom after that . Within a year, he took up a job at a finance company.

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My plan is to invest it in mutual funds (mix of equity and debt funds), and withdraw around 5 % every year.
Good idea. Popular methodology is equity weightage equals (100 - your age). That is, at 60, you should have 40% in equity funds and 60% in debt funds.

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This would take me till age 80, if I live that long. In case I do, and will be in dire need of money, I always have the option of selling my flat. Currently I can sell if off for 1 crore, though I bought it for 53 lakhs 12 years ago.
Better idea -> go for something called "reverse mortgage annuity plan". Do a Google search for more details, but this is how it basically works:

1) You pledge your home or apartment to a bank.
2) Based on the valuation of the property, they will pay you a monthly income of up to Rs. 50,000 per month
3) You and your spouse can still stay at your apartment till the end, no worries.
4) Your children are then given an option -> pay back the bank with interest and take possession of the apartment OR take the proceeds from sale of the apartment/house (after deducting whatever they paid you with interest)

You can avail reverse mortgage annuity plan at all banks:
http://www.nhb.org.in/RML/RML_Index.php

Last edited by SmartCat : 4th August 2018 at 22:38.
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Old 4th August 2018, 22:34   #34
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I will never consider this option. For me it is "Work till you die" or "Work till you are physically capable". Once you have earned enough you can always switch to a less stressful job, work less hours/days, take longer vacations, do a voluntary job or a normal job and donate earnings to charity.
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Old 4th August 2018, 22:42   #35
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Interesting thread and perspectives. I retired when i was 59. I wanted to retire at 58 but had to work a year more, honoring the request of the Board.

I now 'work' pro bono with some educational institutions and with the Government, when they want me. I do some light consulting, strictly if it is light and the subject interests me. I occasionally interact with students and very occasionally take some students ( or young people) out with me to some nearby National Parks and wildlife sanctuaries. I get to learn a lot from them, which helps me immensely when my wife and i go our on our travels (a sophisticated word for roaming).

What do i learn? For one thing, trying to cope with the fear of the unknown. As one ages, one becomes increasing set in his comfort zone and abhors moving out of it-thus losing out on most of the fun in life. i can't say that i am as reckless and impulsive now, as i would have been in my early 20's. However, have realised that micro planning can in fact lead to disappointment. On the other hand, one does not have the chutzpah any more of dealing with curve balls every moment and coming out a winner. So i now temper my urges, expectations and fantasies by factoring in my assessment of my capability-based on prior experience. And by factoring in my comforts, which i do not want to compromise now.

On the subject of (early) retirement: One of the issues that we have to grapple with is that we do not seem to ever move out of our physiological and psychological needs, in the truest sense. While food, drink and shelter may be guaranteed ( for want of a better word) for life, we still worry about health and 'importance'. We are worried that if we retire and become a layabout, our family and society may not respect us. I have friends, who while envying the 'freedom' i have; frankly state that they cannot do the same. This syndrome is a baggage most of us carry due to our upbringing, mental roadblocks and societal pressure.

Working for the downtrodden, for society at large, for causes dear to us, is noble and gratifying- as long as one does not get caught up in the 4th stage of Maslow's. There are many 'Gurus' in india today who started out with noble objectives-however, today they are trapped in competition (amongst themselves) and oneupmanship. From trying to get the first citizens attend their discourses and programs, from increasing their 'market share' of followers, from increasing their 'glam content'.
Point being made is that we are old corporate citizens and while you can remove us from the Corporate, you cannot remove the corporate (management behavior) from us. A desire to engage in some charitable work, may soon see us setting up a LLP, deciding on which directors would be most 'suitable', vying with others in similar areas, actively spending more time and energy to increase 'market share' and exposure...you get the scenario.


I am no different- but i am trying.

ps: Not all are the same.

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Originally Posted by V.Narayan View Post
I voluntarily retired recently and switched to a second career that I hope will be more meaningful in the long run ...
Congratulations. Wish you all the best and am sure you will succeed.

Last edited by ampere : 4th August 2018 at 23:11. Reason: back to back posts merged
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Old 6th August 2018, 16:16   #36
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Default Re: The Early Retirement Thread

Indeed a startling thread!

Should we or shouldn't we is the question? If we should, how much is enough? As the veterans pointed out, how much is a subjective term. For some, 2 crore might be sufficient, for some, 5 crore may not be sufficient.

Considering the expenses we have today, I think I am inclined to say that 5 crore is the way to go. How we'll manage to earn that, I am still trying to figure that out!
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Old 6th August 2018, 21:12   #37
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Interesting thread and nice opinions.

My take - what does one needs to retire from - current Work / Profession?

Even if someone manages to retire from current Work at 40 or 45 years of age, he / she will have to do something else (e.g. Hobby, Social Service, etc) for rest of his / her active life to keep busy.

Soon that "something else" becomes sort of full time or almost full time work / profession from which the person would like to retire.

I would say one needs to be productive till the last day of his / her life. We have our calculations but we never know...

On different note, I am witness of following health expenses of elderly couple between 65 - 68 years over last two / three years:
2016 Wife: Knee Replacement - Rs. 2.85 Lacs
2017 Wife: Knee Replacement - Rs. 3.00 Lacs
2017 Husband: Both Knee Replacement - Rs. 5.4 lacs
2017 Husband: By-Pass Surgery and other complications - Rs. 10.25 Lacs

The above roughly comes down to Rs. 22+ Lacs over last two years + regular illnesses and MOST IMPORTANT Household expenses and other costs.

I understand everyone may not have such medical costs, but just imagine the cost of above treatments 20 - 25 years down the line.

By retiring early, are we salaried people able to envision cost of living 25 years down the line?

Thanks,
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Old 6th August 2018, 21:56   #38
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Quote:
Originally Posted by Jignesh View Post
On different note, I am witness of following health expenses of elderly couple between 65 - 68 years over last two / three years:
2016 Wife: Knee Replacement - Rs. 2.85 Lacs
2017 Wife: Knee Replacement - Rs. 3.00 Lacs
2017 Husband: Both Knee Replacement - Rs. 5.4 lacs
2017 Husband: By-Pass Surgery and other complications - Rs. 10.25 Lacs

...
I understand everyone may not have such medical costs, but just imagine the cost of above treatments 20 - 25 years down the line.
This is a VERY important callout! You are righty, we never know how much our late-life medical expenses are going to be, so that "buffer" of 20% (out of which say one-third would be for medical expenses) is making a huge assumption that bills won't be excessive.

Personally, I am looking at Tier-2 towns where I can still continue to work and earn a decent salary, but where the weather and traffic are not so extreme. Looks like there is no such place.
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Old 7th August 2018, 10:23   #39
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Personally, I am looking at Tier-2 towns where I can still continue to work and earn a decent salary, but where the weather and traffic are not so extreme. Looks like there is no such place.
Even tier-2 towns are doing no better. I compared the cost of living in Bengaluru and my home town (tier 2 city) in North Karnataka. The cost of living in tier 2 cities is very much the same as bigger cities nowadays. Rents are lesser in smaller towns but groceries, vegetables, fuel prices, medical bills are nearly the same. In fact, for me, grocery bill is lesser in Bengaluru when I purchase online

The fact is people migrate to larger cities because there are not many jobs in smaller towns (except for government, banking, teaching sectors) that can pay decent salaries. This is the unfortunate aspect of our country with skewed development, but that is a matter for separate discussion.

Last edited by AltoLXI : 7th August 2018 at 10:27.
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Old 7th August 2018, 10:45   #40
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I doubt I could live with early retirement. As long as I can manage things on my own, I'd rather work than sit at home (workplace permitting).
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Old 7th August 2018, 11:09   #41
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A very interesting and near to my heart topic. Over the past couple of years, I have been pushing my financial planning to achieve this very thing - Early Retirement.

Right now, the thing that runs in my mind and pushes me to perform better is to move up the corporate ladder & corporate pay-scale.

- Up the corporate ladder because I would most certainly like to achieve a position I myself would be proud of to hang up my boots
- Up the corporate pay-scale because that is what is going help me achieve the goal of retirement at 50.

Currently, 33 (Will be turning 34 in October), when I look at the goal I have only 16 years to create the wealth to achieve early retirement when I have turned 50. I have long done my financial calculations to hang up my boots by the time I am 55. Reducing that by 5 years is a big task I am facing.

Why a big task? Because I do not want to do it at the expense of losing my enjoyment today.

What after 50? - Have some thoughts in mind to do something I love and give back some of the knowledge I have gained over the years to the then 'New Gen' but by no means for earning more money. At the same time, not be worried about getting up every morning & running to office, sitting at a desk & doing the regular chores of an office job.

My advise to all those who are looking at early retirement, start planning your finances right now and push for unachievable goals.

'Aim for the stars, because even if you fall short, you will land on the moon'
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Old 7th August 2018, 21:38   #42
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Originally Posted by tejas08 View Post
Currently, 33 (Will be turning 34 in October), when I look at the goal I have only 16 years to create the wealth to achieve early retirement when I have turned 50. I have long done my financial calculations to hang up my boots by the time I am 55.
Nice! . Wish you all the best in your journey towards ER!
Coincidentally, I am at almost exactly the same age as you are, and am looking at 50-55 too as a ballpark age too.

Curious, what is the target corpus / target amount you have in mind - if you don't mind sharing (if you do, please ignore this, I will understand!).

Do you aim for the inflation-adjusted value that reflects current monthly need, or do you account for lifestyle needs going up or down?

Also - how much of a buffer % do you factor in, for foreseen & unforeseen expenses (like wedding, education, health surprises)?
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Old 7th August 2018, 22:01   #43
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When I was around 40, I thought I should hang up my boots by 50. Now when I am 52, I am aiming 56. And I fear when I would approach 56, I would like to go till 60. After that I know I won't have a choice. So I have always thought I should be well off by a certain age, to take take care of myself and my family with whatever financial strength I would have achieved by then and I have been sincerely building up on it although not with the help of any professional financial planners.. But as days pass by, it looks like the the needs are increasing and a feeling that whatever I would be saving by then would not suffice; needless to say a prolonged old age is also something to worry about.
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Old 7th August 2018, 22:19   #44
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Originally Posted by rajushank84 View Post
Nice! . Wish you all the best in your journey towards ER!
Coincidentally, I am at almost exactly the same age as you are, and am looking at 50-55 too as a ballpark age too.

Curious, what is the target corpus / target amount you have in mind - if you don't mind sharing (if you do, please ignore this, I will understand!).

Do you aim for the inflation-adjusted value that reflects current monthly need, or do you account for lifestyle needs going up or down?

Also - how much of a buffer % do you factor in, for foreseen & unforeseen expenses (like wedding, education, health surprises)?
Definitely, don't mind sharing the way I am doing my calculations & my investment planning. Target Corpus would definitely differ from person to person & the lifestyle expected post retirement. Took me a good couple of years to work out the finer details of the financial planning or retirement planning.

The first thing I have done while doing my planning is consider the current lifestyle. If you cant live like what you live today, you haven't correctly done your financial planning or retirement planning. So all my calculations consider the expenses as on today, inflation adjusted to year 2035 & beyond. Have considered a mix of 5 & 6% inflation over a period of 17-20 years. Having gone through the Inflation rates over the years, I have seen that the average comes to this number when you take into consideration some super high inflation years & some super low.

Corpus for child's education & marriage has been considered separately. Different investments for all the three things - Retirement Corpus, Child's Education & Marriage. With the current investments planned, I am reaching to somewhere between 90-95% of the corpus requirement.

This does not mean that I have already started investing the required amount on a monthly basis. It only means that I have planned to step-up the investment amounts at regular intervals.

As of now, no buffers are considered for medical expenses or health surprises. I plan to increase my medical insurance amount substantially at regular intervals. Hoping that this suffices. Additionally, none of my calculations considers any inheritance of any property, wealth from my parents or in-laws. So you could call that as a buffer .

One of the key things to consider alongwith early retirement is long retired life. The earlier you retire, the longer the retired life is and the life expectancy also increases as you would not be putting yourself through the higher stress during the age of 51-60 or so..

If there is one thing I haven't worked out yet in all this financial planning is upgrading from Honda City to Octavia vRS to a Mustang GT

Last edited by tejas08 : 7th August 2018 at 22:30.
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Old 7th August 2018, 23:27   #45
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Originally Posted by skchettry View Post
When I was around 40, I thought I should hang up my boots by 50. Now when I am 52, I am aiming 56.
...
But as days pass by, it looks like the the needs are increasing and a feeling that whatever I would be saving by then would not suffice; needless to say a prolonged old age is also something to worry about.
Thank you sir! Hope you are able to reach the point soon!!
Do you think this moving target is due to unnecessary lifestyle changes, or do you think it is more of a miscalculation?
If you could go back to 40 y/o, how different would your calculation look than what you did then? (just as learnings for the younger generation)

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Originally Posted by tejas08 View Post
Definitely, don't mind sharing the way I am doing my calculations & my investment planning.
...
If there is one thing I haven't worked out yet in all this financial planning is upgrading from Honda City to Octavia vRS to a Mustang GT
Sounds like a solid plan to me! . The only part I am not sure about is relying on insurance alone for health needs, but then I am ignorant about health insurance, its nuances and how it works. I guess I am just paranoid that some condition may come up which they decide is "not covered". I guess I'll read up about this.

Definitely feel ya on the need for motoring nirvana at the end of all this! I'll treat myself with some piece of two-wheeled niceness when I've met my goals (whenever that is). Rough idea in my mind is a classic restored Yezdi or maybe an original carbureted Zen, but I am not sure that these will still be possible a couple of decades from now, so let's see.

(Side rant - why didn't they teach us all this in school?! Why aren't Personal Finance, Investments, Insurance, Personal Health and Relationships 101 five major subjects for everyone? I bet most people can use these a lot more than analytical geometry or the detailed insides of a frog!)

Last edited by rajushank84 : 7th August 2018 at 23:36.
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