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I suggest you purchase the Robo advisory tool from freefincal.com. It will help you understand the current state and the projected investment. It gives a detailed analysis of where you stand, what will be your expenses in retirement and how much you need to invest every year to reach the goal

Disclaimer - I am not marketing the product. Since I have used it, I am suggesting it to you since I find it useful.

In the private sector, my wife and I have come to the firm conclusion that retirement is a distant dream. With the constant rise in prices and the priority of our children's education, our savings are rapidly depleting. We are determined not to be a burden on our children and plan to continue working as long as our health permits. Therefore, the idea of retirement seems more like a fanciful thought rather than a reality. And we are sure to come over the battle as winners.

I hope you have calculated your monthly expense correctly. In a metro city, monthly expenditure of 50k sounds too low - I know it depends upon lifestyle etc but still it sounds quite conservative. Of course if it is actually 50k per month, then you do not need 15 crore - 5 crore in bank FD's would be more than enough.

I would advise everyone here to calculate their monthly expense properly. Maintain a diary and log all expenses done in a day for a month or two - this will give you a rough idea of how much money is actually needed. When I say expenses, I mean everything - groceries, public transport, doctor fees etc. When I did this exercise few months back, I even included the 10 rupee tea I used to have in office. Every night, I used to ask all my family members to share their expenditure data. This is a boring task but it needs to be done.

I have been following freefincal.com for some time now and find his approach and ideas resonate with mine. Again, his approach and style may not appeal to all, but unless we are qualified financial professionals ourselves, we need to find someone whose ideas aligns with our thinking and we can follow. This does not take away the need to work with a qualified advisor, but that also comes at a price unless we want to trust our money to many of the newly minted fininfluencers who are dime a dozen of late.

As another user of this particular Robo Advisory tool, I think it is a good one to help with planning the required retirement corpus. But at the same time, this is a paid tool and you have to decide for yourself if this is worth the price. I too am not associated with this website or this tool except as a consumer/buyer.

There are enough simple calculators available online and one even shared earlier in this thread which help you do a quick check for your personal situation. SEBI has a bunch of calculators on their website (https://investor.sebi.gov.in/calculators/index.html) which might be worth a look as well. These could be a stepping stone before buying a paid tool purpose-built for retirement planning.

While the numbers look daunting, I would not focus too much on them. Everyone's financial situation is different and we need to assess it based on what we need/expect in retirement incl. where we want to live etc. As other members have mentioned while one person may want to plan for 15 crores retirement corpus, another can make do with 3 crores only :)

As part of the retirement planning, what to do with one's time also needs to be thought about, be it a passion, hobby, or spiritual pursuits. This will help prevent too much spent on repeated financial scenario modeling in Excel :D

Thanks for your suggestion. I did buy a plot (30x40) in 2012 and I have also constructed a simple 2BHK house in that plot. The plan was to stay there after we move. But since then, we feel that we don't have enough open space in that house. So, I went and brought a slightly bigger plot couple of years back. I will do the construction on that plot after we move to that place and the rental income from the existing building will continue.
I am also staying in an apartment here in BLR, which I have brought in 2005. It's a very basic apartment building with just 35 flats. But it is in prime location. We will see whether we want to rent this flat after we move or give it to my kids who will stay in BLR.

So you already have multi-crore portfolio in properties clap:

Even a basic 2-4% rental yield (based on current market prices) shall be good for your annual expenses to get covered.

Rest of your savings will allow you to enjoy your sunset years better.

Thanks!

That is my average expense for the last 3.5 years in a Tier 2 city in Kerala. This does not include rent (have own house) or big ticket expenses.

Thanks to covid and post-covid remote working, I've been able to spend a months at a stretch across a few tier-2 and even tier-3 towns in coastal and north Karnataka. The difference in cost of living is astounding. Back in Bangalore and it's amazing how quickly I get used to paying outrageous prices for stuff. More than the lower prices for the same things, it's the amount I spend on stuff/experiences that I don't really need, when I'm in Bangalore. Lifestyle is very different here and there. And the best part is it's actually a better quality of life in those smaller places for a lesser price!

Understandably, there are very sound reasons for people to stay on in big cities. But something to certainly consider for those of us who can move and don't see ourselves saving multi-crores as retirement funds. My eyes were certainly opened.

A key point would be that the person be continually exposed to Tier-2 / Tier-3 cities over the years. Folks born in metro's/Tier-1 cities will likely find it difficult to move out, both for life-style related reasons and social environment+support.

The figures people quote can mean nothing to you. It depends on the way you prioritise things. Here in Kerala an average CBSE school fees will be around ₹3000-5000/month, add ₹1000-2000 for transportation. Got for a top CBSE school, it comes to ₹8000-10000/month and ₹2000-3000 for transportation. For a IB/IGCSE, it comes to ₹20,000-30,000/month and ₹3000-7000 for transportation. One can say send to government schools and all, but it is not possible for most for multitude of reasons.

There are people who manage household within ₹15,000. Not everyone want to live like that. For a rough estimate, a person aged 35 with a monthly expense of ₹1 lakh will need a retirement corpus of minimum ₹5 crore (attaining that isn't that difficult to be honest, unless you buy car or home beyond your means). You can say any excuse like YOLO, but neither philosophy will feed you when you are old, nor will memories suppress hunger. And those who count on children as their retirement corpus, I can only admire your guts! For all practical purposes, one will need to save at least 15-20% of income and get a return of 12% on it. Else it will be difficult to sustain provided you live long!

Should we also consider that after 55yrs age probably your expenses might come down a bit, reason being for most people their kids would be working by now so they may not need your support, if anything might as well help you with household expenses and you may eventually save more.

All of the above considering you have already saved for their marriage, so your monthly outgo would be limited to you and your spouse.

Does this logic make sense ?

Big ticket expenses like buying or upgrading car, home renovation etc. change this drastically.

This is what even I had mentioned earlier. Even I take my own example, I have been tracking my expenses for more than 5 years now. Around 57% of my yearly expense is towards my kids education and other expenses which I will not have to worry during my retirement life.

With such logic, we wouldn't have economics, budgets and any planning. If God were to provide even when a person has nothing, then we wouldn't see such massive poverty in the "holy spiritual sub continent". Unfortunately, a person needs to be prudent and provide for themselves. Why should a person shun everything at 60 and lead a minimalistic life? Why shouldn't he or she have a laptop, AC, a good home, latest TV and a good vehicle? Being 'spiritual', whatever that means, doesn't have to mean living in discomfort and being dependent on others to survive. It is prudent to plan beforehand when we have the capability to prepare.

Sir this thread is a serious thread to help those with genuine questions on retirement planning. Hence as a successfully retired person pursuing what you call spirituality in my own way I feel compelled to respond. You may have saved enough with your career to not have to worry too much of retirement finances but not everyone is that fortunate nor has everyone, like you, worked overseas at healthier salaries.

Good for them mate. One can adopt this sanguine attitude only after the basics have been taken care of.

No disrespect to him but like Queen Elizabeth II he could afford to 'never touch currency' only because others were taking care of it and footing the bill. We are dealing with ordinary citizens with genuine questions and not philosophers.

Do I sense a sneering tone in that phrase Death Planning? I call it good sense and at my age I have ticked all the boxes - save for your evening years, write a will, protect your health insurance and brief your spouse/children on your finances and where the papers, passwords etc are. Death is the most inevitable thing in life with a 100% surety of occurrence. It is not something to be sneered at but accepted and planned for.

Let each decide what works for them. Why preach. Preaching assumes superiority. You cannot suddenly at 60 switch gears on your consumption patterns, attitudes, strengths, desires etc etc. Why 60 why not 75 or 40 or any other age. Why does one have to be minimalistic? It maybe your philosophy it may not work for all.

I am foxed at this statement. After you have gifted away, without recourse, all your material wealth and kept not a paisa for yourself then I would like to revisit this statement. My advice to other readers - if someone tells you money doesn't matter make sure you listen to them only after you have enough money. God only helps those who help themselves.

And pray what does this have to do with retirement planning?

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As bulk of the recent dialogue was around corpus to save up my two paisa worth is as follows -- Fromm y live experience we need about 17X to 20X of income bearing corpus to yield an annuity income that net of income tax meets our needs. Allow me to illustrate this. Let's assume our annual consumption is a reasonable Rs 30 lakhs per annum. Grossed up for tax this would be about Rs 37.50 lakhs per year. 20X of 37.50 lakhs will be Rs 750 lakhs. So other than a house free of mortgage that is what we need. These figures are in "today's" Rupees. But as we save over the coming 15 to 25 years while the nominal figure of Rs 750 L will increase so will our earnings and savings. Hence so long as we are not living beyond our means EMI to EMI most of us will save up enough to sustain a decent lifestyle. For most of us the bulk of our savings come in the last 10 years of our commercial careers. Also many of us will and do have a second career after 60 or 65. It may earn us less but it is there. The savings for retirement is not as dire as it is made out to be.