[V.Narayan]

Originally Posted by SideView

Interesting discussion.What is preventing the insurer from suddenly increasing the premiums to unreasonable amount once we reach 60? Or once we start claiming too much?

You may want to talk to your health insurance company for specifics. Your premium will jump substantially only if you clock in some serious illness and claim big insurance amounts. There is nothing magical about age 60 that causes premiums to jump. My premiums have remained steady. On my health there has, touchwood, been no claim for 20 years. I hope it stays that way. Insurers factor in such things. At 60 if you go to buy insurance for the first time either your premium will be sky high or you wont get cover on all pre-existing conditions.

[shankar.balan]

Hiya

All that we are wishing to do is to retire early ish, with a good sized corpus, which, through one’s investments, will yield a comfortable income and allow us to pursue our interests and passions. Some may consider the lifestyle as lavish, relative to others. Some may consider the lifestyle just average and some others may consider that we are far beneath them. This is entirely relative and subjective.

The main thing is that we need to be able to manage the inflation while still continuing to live the way we want to and not having to stint and scrimp and scrounge.

We in particular do not have the other worries or concerns about children’s education and marriage and all that stuff. Nor are we required to create any kind of inheritance for anyone else.

What we earn in our earning years, we wish to save intelligently and invest wisely and well, in order to be able to achieve a SOLID inflation proof income, to spend and “burn” exactly the way we want to, during our lifetimes once we stop working. And I have NO problem with being an anonymous non working, nobody. As long as I have the freedom to do what I wish to do, without interference from anyone at all.

Considering that we have decent health coverage and insurance. And a house in which we can actually live if we wish to.

We only want the freedom to travel at will and indulge our hobbies and enjoy the finer things in life without fear. And to maintain what we are used to.

So really, the things that we would want to calculate / assume in some reasonable manner, is only the following.

1. Number of years in retirement - say 25-30 (lifespan)
2. Expected Income (buying power of approx 50-60 Lakh per annum at today’s rates)
3. My guess is that to achieve the above, one has to have an income yielding corpus of atleast say 8 to 10 Cr if not the earlier discussed 12 Cr.

And inside of this corpus, while it may be yielding such an income, it is not as if each and every month, one will be spending all of that income, so some of that income will end up getting ploughed back in, or actually remain un-touched in some months which overall will help with some level of additional compounding and increase in corpus.

My own thinking is that the interest that one’s investments are yielding and which one is consuming in the form of a monthly income after retirement, should actually beat the rate of inflation that one will be experiencing over the same period of time. So that the value of the money one is receiving is intact and is able to sustain the same level of buying power despite inflationary influences.

So in order to achieve this level of income and be able to enjoy life nicely within the said income, what can one assume to be the expected inflation rate year on year for the next 30 years?

And what can one assume to be the expected interest rate that one can earn from one’s investments, year on year for the next 30 years?

Is this thinking correct or wrong according to the Gurus here?

[pseudo_coder]

Originally Posted by shankar.balan

2. Expected Income (buying power of approx 50-60 Lakh per annum at today’s rates)

Although it differs from person to person, I think this amount is too much for the average person.

For buying power of 50 lakh, one needs an income of 65 lakh per annum. How many people have such buying power even while they are earning?

[GutsyGibbon]

Originally Posted by pseudo_coder

Anyone doing Amway or similar network marketing for early retirement? I classify them as grey businesses.

It is a sureshot way to lose friends and relatives. There are tons of stats online from people who have lost money with Amway and other such schemes.

When you know that 90% of people who get in will lose their investment, one has to be evil to draw friends and relatives into this plot. There are lots of unethical illegal schemes that circumvent the laws of the land because of various reasons.
https://www.moneyaftergraduation.com...yramid-scheme/

Dont believe anything you read on truthaboutamway.com, it is anything but truth. Listen to the 90% who have lost their money.

Originally Posted by shankar.balan

3. My guess is that to achieve the above, one has to have an income yielding corpus of atleast say 8 to 10 Cr if not the earlier discussed 12 Cr.

My dream of early retirement keeps getting updated to something closer to real retirement, because of such numbers. What kind of discount would you apply to people wanting to retire in a second-tier city like Mysore, Shimoga, Mangalore, or Shimoga?

The first 25 years of my life was in Bangalore, and it was nothing like the new Bengaluru. Bengaluru is not on my list of retirement destinations. I was born in Mysore, and it still has a special place in my heart. My dream is to leverage the value of land in Bengaluru, buy a larger piece of land in Mysore, and still have some money left to enjoy retired life. My estimate for retired life in Mysore was $1M for my lifestyle, I feel that its still very much feasible.

[Latheesh]

Reading all these corpus figure have me really confused. Are there anyone here on the forum managed to do that by doing a normal job in India?
I became bit serious about my personal finance few years back and closed my home loan in 2015, became debt free, and that itself was a big relief. Another important decision was to not to change the car I had, and used the small hatchback I bought in 2009 till 2019. I have few RDs running to meet annual recurring expenses (health insurance for family, parents, child's school fee etc). I am thankful to many TBHPians who answer our queries related to personal finance. Above decisions helped me to improve my financial situation but figures in above posts are really scary.

I have few mutual fund SIPs running, some VPF contributions, and some FDs (emergency fund). I will be happy if I am able to save 25 years of current annual expense. Anything above is scary for a person like me who grew up in lower middle class family in India. Mango people mentality helped my savings percentage though, which currently stand at 65% of my take home salary.

[shankar.balan]

@pseudocoder - the way BLR is going, in terms of liveability AND expenses, is crazy.This is why I talked about 50-60 lakh buying power in today’s money. To be able to live well, travel at will, be fearless in the pursuit of all sorts of hobbies, some inexpensive and some, expensive, Im thinking this kind of income will be required. Thing is, after you retire, you’ll have a lot more time on your hands. And that time should be usefully employed in pursuing hobbies and passions - at least thats what I hope, will effectively constitute “work” in my case, at that stage.

@gutsygibbon. - You’re saying that you will need 1M USD to retire in Mysore. This is a Rs 7 Cr. Corpus Give or take. And another question is WHEN do you intend to retire.I’m thinking in today’s terms itself that this BLR estimate of Rs 8-10 Cr Corpus is making sense in relative terms. Cost of living ain’t cheap. Nor is medical treatment cost in the days to come.

@Latheesh - I started with a Rs 5000 per month salary 27 -28 years ago. The costs and prices of 27 -28 years ago have gone up 30-40 times in that many years.

Paycheques and Salary also has of course increased but not to the extent where one can actually save that kind of money before retirement UNLESS one has made money in the Share Market or Property Market in the Boom years, or if one has inherited big wealth OR if one has been amongst the fortunate few whose ESOPS turned to Gold.
For the rest of us normal people (including people like me who are blessed with Champagne Taste but are cursed with a Beer budget!) , well, we are plodding along and doing our best to save 30-40% of our incomes in various instruments like property, mutual funds, equities and share market, so as to remain comfortable in the longer term, in the long years of retirement. I am now 48. I dont know if I actually have another 30 years on this planet but I’m guessing maybe I do.

I’m guessing one will be able to and probably HAVE TO work until one is say 55. Which means another 7 years of plodding along. Now the trick question is, can one save enough to make up the requisite corpus in the available time or not?

Which is why I am keenly trying to get some guesstimates on the earlier queries posed - the likely rate of inflation Y-O-Y and the likely rates of interest Y-O-Y. With these details, one just MIGHT be able to plan a little better.

Yes, I am worried. Like I’m sure everyone else is too. It’s just that I’m older and hence probably more worried than others.

[kavensri]

This is really useful thread. I am already 45 and planning to work for another 10 years. So, it is not really an early retirement plan for me. Nevertheless, I still thought of sharing my plans.
I am the only earning member in my family of 5 (mother, wife and 2 daughters). My current annual expense is around 12l, including everything.
My retirement plan is something like this.
To get monthly income between 50k-75k through
• Monthly rental of my current flat (I am planning to move to Chitradurga post retirement where I already have one small house constructed).
• Annual Interest from my and my wife’s PPF accounts. Judicially putting 1.5l in each of the account since last 4+ years and planning to do so for next 10 years.
• LIC pension amount (have 3 LIC pension policies already).
• SA pension amount (my company has this SA facility where I have built a substantial corpus already since last 11+ years).
• NPS (I am contributing to this fund through employer’s contribution which gives me unlimited tax exemption as added advantage).
• APY pension amount of my wife
And then, build a corpus amount through
• EPF (have been putting extra 28% as VPF since last 21+ years)
• SSY
• Gratuity
• FDs
• I have couple of plots which I am planning to sell
Some of the amount from corpus will be used for kids education and marriage, before the retirement.
As you can see, I am very much conservative and risk averse person. So, I have not put anything in MFs. The only market linked investment that I am making is NPS.
And of course, I will not sit idle and will be doing some other work after my retirement.

[deadguy25]

What about forced retirement?
I was eased out of my job on 01-October-2019, after close to 15 years at one place. A total experience of about 17 years.
I am living on savings and a bit of investment returns that were done some time back. Now that it is December, openings are hard to come-by, hence will wait until mid of January 2020 and then see if lady luck has anything for me.

@ mods, if this has to be moved to some other thread please do so.

Well, I wanted to retire early, and I was made to.

[pseudo_coder]

Originally Posted by deadguy25

I was eased out of my job on 01-October-2019, after close to 15 years at one place. A total experience of about 17 years.

Sorry to know this. And appreciate your honesty. Not many can say this.

What's your profile? May be someone here could help?

[Durango Dude]

With the way things are; retirement is out of the question. I'd like to work as long as God allows me and would like to support my family that long. For that one needs to also have a healthy life style and do periodical checks of all bodily systems if they are functioning to optimal capacity. Eat healthy, exercise regularly and drive safely. Most of us have a life style to maintain and that means one needs to keep earning to make ends meet. So say a selfish prayer, lead a healthy life style and save up for the rainy day. Retirement can wait.

[suresh_gs]

It is better to keep yourself engaged in work rather than live on what you have saved. God forbid if a major illness strikes you, you have to rely on your savings and looking at current scenario in terms of medical cost, by the time you realize the gravity of your illness, all your saved money is gone.
Depending on your kids / relatives is the only other option i can think of but up to what extent. Even your kids will be having a family to support.
I look at life in this way. "IT IS BETTER TO LIVE LIKE A LION FOR EVEN FEW DAYS RATHER THAN LIVE LIKE A DOG FOR THE REST OF YOUR LIFE".

By the way I am in my mid 40s

[kavensri]

Originally Posted by suresh_gs

It is better to keep yourself engaged in work rather than live on what you have saved.

Originally Posted by Durango Dude

With the way things are; retirement is out of the question. I'd like to work as long as God allows me and would like to support my family that long.

Very well said. Even I would like to do the same. But with the current situation in IT sector, especially for senior most positions (20+ years’ experience), it is extremely difficult to predict how long we can continue working in this field.

Originally Posted by deadguy25

What about forced retirement?

So, even though I have already started getting income from pension schemes, I am not spending that amount and re-investing the same back into onto FD’s and others. Basically, I am preparing for a worst case scenario when I had to stop working next day!

[suresh_gs]

Originally Posted by kavensri

Very well said. Even I would like to do the same. But with the current situation in IT sector, especially for senior most positions (20+ years’ experience), it is extremely difficult to predict how long we can continue working in this field.


So, even though I have already started getting income from pension schemes, I am not spending that amount and re-investing the same back into onto FD’s and others. Basically, I am preparing for a worst case scenario when I had to stop working next day!

I am in the same boat as you are sailing in terms of age and experience. An alternative job option I can think of is to join the teaching profession as a visiting faculty. With the knowledge we have gained by working in the industry for so many years, we can train the students as well. Of course we should also be in touch with what is going on currently.
So all said and done, the urge to learn irrespective of your age should never dip at any cost. By this your mind is also engaged.
Remember an idle mind is devil's workshop.

[kavensri]

Originally Posted by suresh_gs

I am in the same boat as you are sailing in terms of age and experience. An alternative job option I can think of is to join the teaching profession as a visiting faculty. With the knowledge we have gained by working in the industry for so many years, we can train the students as well. Of course we should also be in touch with what is going on currently.
So all said and done, the urge to learn irrespective of your age should never dip at any cost. By this your mind is also engaged.
Remember an idle mind is devil's workshop.

Seems like, we do have some common interests? Even I am thinking about teaching as one of the profession after my retirement. I am very much interested in Mathematics (I was damn good in Maths during my school/college days) and I would like to teach students (especially below 10th standard).
May not be for monetary benefits, but as some kind of service to give back my skills to the society! Let me see how the things turn out for me.

[suresh_gs]

Originally Posted by kavensri

Seems like, we do have some common interests? Even I am thinking about teaching as one of the profession after my retirement. I am very much interested in Mathematics (I was damn good in Maths during my school/college days) and I would like to teach students (especially below 10th standard).
May not be for monetary benefits, but as some kind of service to give back my skills to the society! Let me see how the things turn out for me.

Even Maths was and is my favourite subject. You can enroll in URBAN PRO where there is demand for tutors.
In the current situation where majority of the parents go to work, not all kids are sharp enough to digest what is being taught in school. In such situations, your knowledge will come in handy.
You can charge substantial amount for tutoring kids.