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I think the definition of 'financially comfortable' differs and plays a big part in arriving at the figure one is comfortable with. For some it means maintaining the same level of lifestyle in their 70s, and for some (like me), it would be ok to move out of a metro city and live a much simpler, even boring life, if it means I can do that earlier, while I'm relatively younger and healthier to enjoy that. About expenses, as an example: there is a small town in North Karnataka I visit quite often in pursuit of an outdoor activity, and honestly the price of a meal at one of the normal hotels there is cheaper than cooking at home. And much healthier and very nutritious. (Let's not even go into comparing it with the ridiculous cost of/getting ripped-off eating out in Bangalore!) And if it were just up to me, I think I could happily retire there.

It's ok for each person to differ naturally, but just saying that it will require a fair bit of introspection. And so blanket figures like 'x Cr or y per month' don't work for everyone.

True and this is what I had posted on the thread what car at what salary

So, if one is confident of generating cash flow for their requirements till the end from whatever corpus they built up early on then that's good if not then it never hurts to account for a little extra while one can. :)

I don't know how apt the label "typical Bangalore IT guy" can be applied to folks with 3-4 properties :) That aside, for a property as we well understand, a lot depends on the initial investment value, their location, appreciation potential and when the investment was done. Sites invested in 2007-2012 have gone up significantly in value now. But whether this will continue to do in future is anybody's guess. Given the current valuations, arguments can be made for both sides with no one any wiser to what will actually happen. My wife is a firm believer in real estate and its potential for bumper returns in future :D But our personal experience has been mixed between stuck stagnant and reasonable appreciation. I am only talking about investing in sites here and not commercial real estate or flats. Anyway at the end of the day, to each their own, I guess.

For a retirement period of 35 years (e.g., a person at 50 today with life expectancy till 85), I believe a sum of around 5.5 cr today could suffice. This is assuming the inflation adjusted monthly expense of 1.5 lakhs for the first 15 years and then a monthly expense of 1.0 lakhs for the next 20 years. This is with the assumption of an inflation rate of 6% and corpus annual return of 6% - idea conservatively is portfolio growth is at least equal to inflation so that corpus withdrawal rate stays the same.

The other assumption here is that the indicated monthly expenses are only for living + some annual recurring items - basically only retirement related expense. Big ticket items like children's marriage, foreign travel, addl. medical emergency amount, etc. need to be planned for separately. At least, this is how I am planning at this time.

Can't agree more! Relocated to Kerala 5 years ago (WFH) and left the rat race and enjoying the peaceful nature and high quality of living -- quality of living is something you can't buy with money! You can sort of call me a semi-retired guy

You should read the book "Who moved my cheese". Just because Real estate has worked for 30 yrs, doesn't mean it will work for every one who is starting to invest. I believe in the last 10 yrs or so, we havent seen the outsized returns that are the stories circulating around. The hype around Real estate investment helps only land owners and Real Estate firms, who have started to book future profits / growth at the time of selling the plot.

The risk is also not low as illegal occupation or false civil cases etc. freezes your asset for a long time. Do make Real Estate a part of your portfolio, but in a calculated manner.


On the numbers, Let me answer a bunch of questions at one go.



Do see my novice 10 minute attempt at creating the retirment calculator. Given this is retirement, I have made conservative assumptions around post tax returns and slighly pessemistic assumptions around inflation. You can tweak this per your use case (Cells marked in yellow can be adjusted)..

Retirement Calculator.xlsx

LMK if some thing is off with calculations attached.

In my case, I am 40 years old. Assuming my current yearly expense is 18 lakhs per annum (includes all expenses), and I have a few big ticket expenses lined as up indicated, starting with a corpus of 15 Cr, at 80 years of age, I would hardly have any money left in the bank.

For folks who say 6Cr is enough, For the next 20 yrs or so it will look fine, but the time after will be hard as at 60yrs, it will be hard to find employment . I'd rather be consevative with my calculations.

B.T.W. This is not qualified or professional advise. Invest in a competent fee only financial planner :) They cost a few thousands per year, but the advise is absolutely valuable.

This entirely depends on one's lifestyle. It's really a simple calculation - take your expenses today and add an inflation amount every year compounded.

But I would be careful to comment on weather 6cr is enough or 15. This entirely depends on one's lifestyle.

It also depends on when a person retires - meaning a person retiring at 50 today may need only X, while a person who is 40 today will need 2X to lead the exactly same lifestyle if he plans to retire when he is 50. So my point is, with this forum having members all over the age spectrum,.it's very hard to suggest what that magic amount is to retire.

It's a simple.excel calculation. Let everyone do their own. Rather I would focus on coming up with a formula that works for everyone. For instance, what factors to consider while arriving at such a calculation:
1. Current expenses
2. Inflation for next 25 years
3. Interest on current investment for next 25 years
4. Medical expenses cost over 25 years.
5. Cost of car/bike purchases in future (:D)
6. Travel expenses

Others such as childrens education etc, should be seperately considered. For most people, at retirement, they would not have these extra responsibilities.

My 2 cents: May be we are over thinking because of too much free advice available on the net. I am really surprised that nobody mentioned spirituality as a prerequisite for retirement especially for people born in the holy spiritual sub continent.

In our close family, We have a lot of senior citizens doing centuries. I have attended numerous Shastipurthi (60 years) and Sahasra Chandra Darshana functions ( who have lived for 1000 moons, 81 years and 1 month ) and grand birthday celebrations for 85,90,95,100 years. I have spent a lot of time talking to these seniors. They are very positive and never ever talk about finances. They think that God has blessed them with loving closely knitted families and everything is taken care of. One of many senior citizens in our family for example www.ugkrishnamurti.org ( has never touched currency and he never stays in any country continuously for more than few days and always flies in 1 st class. He was an octogenarian.

I donot have any equivalent English word for present modern generation what needs to be done after formal retirement age of 60 years as dictated by the society in general. I call it Death Planning(DP). After 60 years one needs to be in the spiritual path and lead a life of minimalistic nature. Less of materialistic aspirations and more of spiritual aspirations. Money is automatically taken care of by God even if you have not saved one rupee.

There are 2 questions one needs to ask when you meet a senior citizen . How is your health? and are your kids well settled and still keep a close relationship with you?

Recently we all have heard of the owner of Raymonds company and what has happened to him. I donot want to dwell into that topic as it is an example of modern society and what happens if we rely too much on kids at old age.

Post COVID, also in our close family I had seen many youngsters died leaving octogenarians alone. It’s also a wonder on how the old people actually survived COVID due to sheer mental strength and spirituality.

There is no limit to the bank balance one needs to have for retirement. One needs to have a spiritual strength to spend the retirement years peacefully.

I did call out that the corpus number I mentioned is for a period of 35-year duration assuming a starting age of 50. And this number was specifically only for living expenses in retirement. For someone at 40, obviously the duration needs to be longer and consequently amount needed will be higher. If longer life expectancy is to be planned for, then yes more amount will be needed. Also, as I mentioned my thinking is that the corpus needs to be invested in a manner such that the returns are at least the same as annual inflation. A real return rate of zero helps avoid erosion due to inflation.

I looked at your calculator and noticed the post-tax return you've considered is lesser than the annual inflation rate. While this could very well be a reality for us in future, over a long time period like retirement I believe we should actively work towards ensuring an inflation-canceling return even if not an inflation-beating one.

End of the day, I fully understand that these numbers are only a projection and there will be personal lifestyle requirements, big-ticket expense needs towards kids, health, travel etc. that will need to be factored in individually as appropriate. I guess this is also why this is called "personal finance" - personal to each of us :)

I completely agree with your comment on using the services of a qualified, professional financial planner as that is the correct way to ensure a stress-free retirement. But I also believe most of the discussion here is other members sharing their opinion from their personal situation. I would be very surprised if someone here took these corpus numbers literally and started their retirement planning based on it :D

I do lot of planning in general when it comes to my finances. I guess, many things have been already written by many of the members here.
From my side, I have the below listed assumptions, that I have considered while planning my retirement finances.
1. More than 60% of my current expenses (like, kids’ education, lifestyle spends, etc) will not be there post my retirement. I am 100% sure that I am not going to spend like how I am spending now (especially on lifestyle products like clothes, footwear, etc) post my retirement. I have kept a separate fund for unexpected medical expenses.
2. If I understand correctly, most of them seems to be worried about the corpus depletion and hence they want to make sure that annual returns on corpus exceeds the annual expense. If this is the case, what will you all do with the corpus amount (whatever the amount that be) after your death? Instead, in my calculations, corpus does get depleted but not to zero at the end of whatever the time period (35, 40, etc) that be.
3. Again, this is my case alone. I am planning to spend my retirement life in a tier-3 city in central Karnataka. As on today, the cost of living there is less than 1/3rd of what it is in Bangalore. So, I have considered this as well in my planning.
4. Considering all these, the retirement corpus that I am looking for is much less than the ‘numbers’ being floated in the discussions here.

Just came across the below today and thought it relevant to share here based on some of the recent discussions on this thread.

https://www.livemint.com/mint-top-ne...ign=easynomics

Cheers!

This is my frame of mind too. But when I hear the high numbers everyone seems to be quoting, I'm wondering if I'm being naive and perhaps have underestimated things. Previously, only the investment advisors used to quote such figures, now it seems everyone has the same opinion.

But few things I'm sure of-

- I'm more than willing to reduce my lifestyle spend and more than willing to get out of Bangalore for retirement (was born here and lived most of my life here). Neither will seem like a 'downgrade' to me, my quality of life will go up actually.

- Not too worried about being next to a hospital in old age. Would rather live peacefully than live in a city just on the chance that I'll need to rush to a hospital. Would be ok with that trade-off, even if it means the inevitable.

- Don't have anyone to leave anything to. Like Colin Chapman's design principle for the 'ideal F1 car', let it all fall apart at the finish line!

Well, all I can say - Remember, wife is always right.
Although, this may not expedite your journey towards financial freedom , but will certainly make it a lot easier lol:

Sharing from personal experience, like all petrol heads, I wanted to first buy Ze German before buying a house. That too, after having already purchased two cars in first six years of earning period. Fortunately, I ended up listening to the better half and bought properties in 2003, remained thankful for years to come for the decision.

Numbers floating here is really scary for people like me!

I am in my early 40s and our average monthly expense is 50K (6L per annum), if we add a buffer of 20% it becomes 7.2L per annum. Do we need a huge corpus of 5, 10, 15 Crores to retire? or Can't we even think of retirement?

One suggestion: get a plot or a house in this place now. The rates I am being told of in such cities today by people looks quite high to me than my expectations (I am comparing to Bangalore rates).

I used to think about retirement till a year back. But seeing these numbers and sitting idle for 5 to 6 months in work without much to do made me realize that it is better to be a tortoise in this game than being a rabbit :). Only difficulty is managing the peer/social/family pressure of - Oh why haven't you become the CEO of Google yet !!!