[subincb]

Originally Posted by am1m

Now, more than the two big questions about retirement- 'do I have enough to retire' (that seems to be on track - not for a lavish retirement, but going ok) and 'what will I do once I retire' (that was never a problem!), I'm finding myself worrying more about what happens when I'm too old to take care of myself.

I don't have children, but I've also seen enough elders whose children are abroad or busy with their own lives to realize that having children is no guarantee of being looked after either.

And even with an entire family to help, I'm not seeing a good scenario. Seeing this with an elderly relative. The person has had a long, fruitful, and healthy life, but now is unable physically and mentally to care for themselves. The family is kind and attentive, and every small aliment is handled to the fullest extent. But it's not a life I'd want, shuttling between hospital visits and home, being unable to really communicate meaningfully, or even recognize family members. It's certainly not the ending I would like.

If you think too much you can't retire. Just quit working and enjoy life as it comes. Life will take shape as per what you have. The moment you quit all tensions will go away. Just develop simple habits and routines which won't trouble you. And don't depend on any habit as well for spending time. What will happen when we get old... We will die when it's time to die and that is for sure so why worry.

If you can't recognise family members and you forget people isn't it good. It's their worry as they know you. You won't have any worry. I have seen my granny in that state always happy. She had no clue who even my mom was. And who knows the future, why worry today so much for a day which may never come. Face it when it comes. Why struggle whole life with all the tensions from getting up on time, rushing in traffic, work pressure, shoutings from boss, wait for holiday to go walking etc etc just because of your fear of tomorrow.

[Axe77]

Mint Money has an excellent interview with Saurabh Mukherjea from Marcellus. (8th April, Page 11). Worth a read if you can get hold of today's edition. Link is included below as well.

https://www.livemint.com/money/perso...491379624.html

Key takeaways, including some of the figures he has pegged at for himself (he is 48 years old today) or similarly placed professionals which he labels as upper middle class / mass affluent class as he calls it.

- Factor inflation (needless to say) but also assess inflation specific to where you land in terms of your inflation basket. For the mass affluent who consume better cars, overseas holidays, richer education / healthcare etc he has pegged this at 8% instead of the CPI figure of 6%.
- Cost of education he has assumed is 4 cr in total. I assume he has timed this with whenever his kids will need education.
- Today's terms, his savings corpus figure is 20 cr. Inflation adjusted, he has pegged this at 50 cr when he is age 60
- He owns the house he lives in but does not consider residential real estate as a suitable avenue of investment. Commercial RE is a different matter.

Other investment related takeaways can be read from the article but just setting his take on the headline aspects of "retirement corpus" and related.

You may or may not agree with some of his principles or assumptions but it’s still interesting reading for the layperson just to understand how to think about aspects of financial / retirement corpus planning.

[Eddy]

Originally Posted by Axe77

- Cost of education he has assumed is 4 cr per child.

Isn't he saying 4cr total?

[Jaguar]

Originally Posted by Axe77

Mint Money has an excellent interview with Saurabh Mukherjea from Marcellus.

Just 10l health cover for the family?

[hothatchaway]

Originally Posted by Eddy

Isn't he saying 4cr total?

Even if it's 4 cr total, is he going to get the head of NASA to tutor them at home? Isn't that a ridiculous figure?!

Higher education today is just as much a commodity as everything else, what is the return for a service (read tuition) which costs crores? It's better to let that money earn interest and live off that.

He is a fund manager, so he may have his own reasons for some of the arguments he has given.

[Axe77]

Originally Posted by Eddy

Isn't he saying 4cr total?

Sorry my bad. You're right - it just says 4 crore as an absolute number. I just edited the original post with that correction but have left the back and forth exchange since there are replies.

Originally Posted by Jaguar

Just 10l health cover for the family?

Even I thought that's really low. Even our family health insurance package is around 40 - 50L IIRC.

Originally Posted by hothatchaway

Even if it's 4 cr total, is he going to get the head of NASA to tutor them at home? Isn't that a ridiculous figure?!

Higher education today is just as much a commodity as everything else, what is the return for a service (read tuition) which costs crores? It's better to let that money earn interest and live off that.

He is a fund manager, so he may have his own reasons for some of the arguments he has given.

If you want to budget for having the ability to pay for both undergrad and post grad both in a tier 1 US or similar university, then that figure is not inconceivable (there may be some indexation at play here as well depending on when they're due to study).

Whether it is the right choice for education or not is personal, subjective and moot - certainly not the subject matter of this thread. I'm pretty sure you can get an education at a fraction of that cost as well. Some of those options may or may not be available depending on the student's ability to snag a seat on scholarship or even merit.

[Eddy]

All his figures make sense of someone with his standard of living or aspiration.

Except the health cover - I think 10L is a mistake. Pretty sure it will be higher.

[hothatchaway]

Originally Posted by Axe77

Sorry my bad.you want to budget for having the ability to pay for both undergrad and post grad both in a tier 1 US or similar university, then that figure is not inconceivable (there may be some indexation at play here as well depending on when they're due to study).

Whether it is the right choice for education or not is personal, subjective and moot - certainly not the subject matter of this thread. I'm pretty sure you can get an education at a fraction of that cost as well. Some of those options may or may not be available depending on the student's ability to snag a seat on scholarship or even merit.

He gives investment advice on retirement planning in the article, in which a fund offered by his firm is also mentioned, so the figures that he quotes, even if they are ostensibly from his own financials, are meant for public consumption. So obviously a reader is free to react basis his own experience and observation.

Just like anything can be had for a fraction of a cost, there is also no limit on how much one can pay and that is fine if we are talking about luxury items like cars and watches. But education is a different area, given that it's a fundamental right. Quoting crores for funding children's education is an outlandish figure for most people anywhere in the world. For example, one can still pursue a postgraduate degree at a leading university for less than tenth of the quoted amount. An equivalent degree overseas will be upto thrice that amount, but still far far less than a couple of crores. Even now, a seat in any of the leading DU colleges are well within the realms of affordability and don't need you to break the bank. Of course, there is an element of merit in that, as is the case of attending an Institute overseas, where many postgraduate degrees come with a scholarship/assistantship which moderates the financial burden. The reason I made my initial comments is because I have dabbled quite a bit in this field, and unless you are talking about flogging a mediocre student through a medical degree, without regard for costs, then it does not even begin to approach that figure. If there is indexation/inflation etc etc implicit in his calculation, then he should state that, otherwise what is one to make of such lofty figures? This is one of the reasons why these articles make little sense to most people.

I don't know why my comments strike you as out of scope. You posted a link to a fund manager sharing investment advice and I questioned some of them basis my understanding. If you didn't welcome any discussion on that perhaps the post should have come with a disclaimer.

[Eddy]

Some of the figures that I am aware of:

MBBS in India in non-govt college = Rs 1.25 cr (without any donation)
B.Tech in IIT Delhi = Rs 16 lakh
MBA in India = Rs 40 lakh

These might double in a decade or, so a grad+post grad in a decent foreign university for Rs 2 cr per child sounds believable.

[am1m]

Originally Posted by hothatchaway

He gives investment advice on retirement planning in the article, in which a fund offered by his firm is also mentioned, so the figures that he quotes, even if they are ostensibly from his own financials, are meant for public consumption.

I'd agree...he already has 20 cr and he needs 50 cr to retire?!

At those figures, how many of us can really retire? How many of us will hit that mark really? And do we really need to?

(And he's calling himself "upper middle class"?! Clearly the wrong label. This is definitely a rich/wealthy person calculation.)

The "article" is clearly a paid advert, IMHO.

[Eddy]

Originally Posted by am1m

(And he's calling himself "upper middle class"?! Clearly the wrong label. This is definitely a rich/wealthy person calculation.)

The "article" is clearly a paid advert, IMHO.

He calls himself "mass affluent"

His business isn't doing too well, AFAIK, so it could be an advert. But this is a weekly feature at Mint.

[NetfreakBombay]

Originally Posted by hothatchaway

Even if it's 4 cr total, is he going to get the head of NASA to tutor them at home? Isn't that a ridiculous figure?!

2 cr per child is pretty reasonable assumption for someone in his income group.

For each child :

Cost of school for 12 years : 48 lakh ( 4 lakh per year)
B. Tech from Manipal / Graduation from Ashoka etc : 30 - 50 lakh
MS from US : 90 lakh

MBBS from Private : 1.5 Cr (26 lakh per year)

[JediKnight]

Originally Posted by Axe77

- Today's terms, his savings corpus figure is 20 cr. Inflation adjusted, he has pegged this at 50 cr when he is age 60

From page you have posted here, he is saying the retirement target in today's money would be 20 Cr and 50 Cr at age 60. He did not say that he has a saving of 20Cr.

[Axe77]

Originally Posted by JediKnight

From page you have posted here, he is saying the retirement target in today's money would be 20 Cr and 50 Cr at age 60. He did not say that he has a saving of 20Cr.

You’re right. I’ve rushed through the para phrasing. I had started out pegging 20 cr today equating with 50 cr then. Changed it to what he’s pegged at as his own goals and it came out wrong. But that’s right. It’s not meant to read as “his” corpus today. Thanks for pointing that out.

Originally Posted by hothatchaway

I don't know why my comments strike you as out of scope. You posted a link to a fund manager sharing investment advice and I questioned some of them basis my understanding. If you didn't welcome any discussion on that perhaps the post should have come with a disclaimer.

I definitely think cost of education (across the various spectrum of options available is definitely very much in scope for discussion on a thread which relates to retirement corpus planning. Navigating through children’s education is after all a necessary part of that journey. My opinion of it being out of scope was to your specific response on this aspect, which I’ve reproduced below.

Originally Posted by hothatchaway

Even if it's 4 cr total, is he going to get the head of NASA to tutor them at home? Isn't that a ridiculous figure?!

This bit above I take it is for impact - neither the tone nor the content of it befits further discussion.

Higher education today is just as much a commodity as everything else, what is the return for a service (read tuition) which costs crores? It's better to let that money earn interest and live off that.

Please re - read your own statement. This bit here is not really debating the cost of education via various different avenues (domestic vs overseas, general degrees versus specialized top tier degrees etc) but seemed to me a more philosophical statement - i.e. what is the return on investment of large amounts in tuition service which is like a commodity.

Which is why I said whether one pursues a local education in DU or one in Harvard is a personal choice. Whether one wants to pay for it through or only pursue it via scholarship is also a personal choice. THAT aspect to me seemed out of scope because it’s a personal decision. I can definitely think of enough examples of success stories where nominal money was spent on education and the converse being equally true as well.

Separately, more than one member has clarified that 2 - 4 crore towards an education corpus is NOT outright outlandish, specially for someone operating in that income bracket. Fact is, I know of enough and more professionals (senior bankers, private equity blokes, senior professionals) who are working towards those kind of budgets (if that is what they need to spend should the occasion arise) needed when they have a couple of kids to put through college. Is this an uber affluent community - for sure, yes.

I’ll refrain from any further back and forth with you on this since I doubt it’ll have any constructive outcome.

[vijaykr]

There have been interesting opinions on the cost of education and yes, it is mainly a personal choice of how much one wants to spend on their children. it is definitely a very wide spectrum and I don't believe there is any one right way here. Aside of its value-add and ability to guarantee a higher starting salary point for children in their career journey, cost of overseas education is steep - both undergrad and graduate programs. Did some prelim analysis for my kids and decided to have them do their bachelor's degrees in India only.

On retirement, he is right that with a 20=crore corpus in today's money terms, his need will be around 50-crores assuming he plans to retire when he is 60 years old. But working backwards from this corpus of 50-crores, his expectation seems to be for a monthly requirement of 6 lakhs per month (yes, monthly!) for a 25 year retirement duration.

If this is how he defines mass-affluent, upper middle=class etc., then I guess I am definitely not even in the lower-middle class, more like lower class maybe! But then, I expect to have less than one-sixth of his monthly requirement in my retirement

Irrespective of how much we keep talking about moving to tier-2/3 towns, reducing expenses, taking care of health etc., inflation is a significant threat to retirement corpus building. In my opinion, this does not seem to get enough attention in all the talk around current stock market returns which seem to have mesmerized many.