[GutsyGibbon]

Originally Posted by pandey.jai

Also, I don’t think there is anything called “ideal retirement kitty”. When one has 1Lac, they would feel 1 cr is ideal. At 1cr, they will feel 3-5cr. It’s a never ending game.

A target need not be completely aspirational, like 100x. You start with, how much in today's money you need to be able to live a retired life today. You then arrive at a number to retire today based on a certain withdrawal rate, or return. Then come up with a plan and time duration to get to this number. The target is for a specific lifestyle. Thinking about retiring in Zurich while living in Timbuktu is not a plan, but day dreaming. While it can be fun, it's not realistic.

For our parents who worked in public sector, this date was set. Today with increasing affluence, people accelerated this schedule, and labeled it FIRE.

[kavensri]

I do have some basic questions.
• When we think about retirement corpus, are we assuming that there is already a provision to get a monthly income (which meets the regular monthly expense) and this corpus is meant for ‘premium’ needs & unexpected expenses? Or we are planning to generate the monthly income from this corpus?
• Reduced family size. Everyone is talking about current monthly expense and then multiply by some factor to arrive at the corpus amount. But, in my case, as of now, we are a family of 5 (mother, spouse and 2 daughters). But, when I retire, my daughters will not be with us and eventually it would be only me and my spouse. So, do we really need to consider the current expense (with 5 people in my case) to arrive at the corpus amount (which is required for 2 people eventually)?
• The cost of living in Tier-2/Tier-3 cities. Again, taking my own example, I will be moving to tier 3 city and based on the difference in cost of living, I think that my regular expense could be less than 50% of what it is in Bangalore now.
• I don’t think I will be spending so liberally like what I am currently doing. So, once again, that factor also needs to be considered (for a person like me), right?

Note: I have been planning for my retirement and as of now, the target is to retire in early 50s (another 5 years’ time). My plan is to have a regular monthly income to meet my basic monthly expense and then use the corpus for ‘premium’ needs and the unexpected expenses (like medical).

[wildsdi5530]

I think this question can be answered well by 80's kids.

When I was growing up, the family income was Rs. 900/-. Dad was working, 4 family members, own 1984 model Premier Padmini, 2 bedroom house, 2 yearly trips, eating out once a week.

Now 30 yrs later, our social strata has not changed significantly but our expenses are Rs. 1.5-2 Lakhs. Me and wife work. 6 family members, own 2008 Honda City and 2014 Mobilio, 3 bedroom house, 2 yearly trips. eating out (4 people only) once a week.

So I'm inclined to assume that in another 30 yrs, when I will retire, monthly expenses will be around Rs. 4 Cr.

Of course this is assuming that we remain middle class. If we move to a higher society housing/ start eating out more than once a week, or move up in society, shift from sedan to luxury car, then our expenses will naturally increase.

So by my calculations, yearly expenses will be Rs. 48 Cr. and for 30 yrs of post retirement life , Rs. 1.5 Lakh Cr would be an adequate corpus. Thankfully, Me and wife are both doctors so I will probably die with a knife in my hand, so I'm not trying to plan retirement which seems futile.

This seems very high looking at the numbers put froward by other members, and I should probably do this fire analysis.

However living in Bangalore, I see so many retirees as patients all of them who were in the upper or middle class - Executives in various factories and central govt posts. They all have financial issues unless their children are abroad or in high positions within India. Parents whose children are middle class suffer as the kids cannot support 2 additional mouths. They suffer for their medical needs (OPD, not IP which are covered by insurance) and are uncomfortable with normal medial expenses. Property tax, water and electricity bills, soon to come garbage bill, etc. is another thing that most of them struggle to pay since they have all bought own plots and built houses. Ofcourse milk and vegetables is another huge daily expense.

While it's quite depressing to see these high flying executives who have travelled around the world in the 90s itself reduced to this state, (All their PPF, pension saving, asset building, retirement planning came to naught.), there are about 50% who have educated their children well and whose kids are in the USA. They are leading comfortable lives with their children booking taxis for them, delivering groceries and food, paying off their bills, etc directly from the USA.

So I think the best retirement policy is to educate your children, make sure they will take care of you in your old age, and pray.

[Latheesh]

Originally Posted by SoumenD

Btw does anyone here follow the reddit sub FireIndia? The numbers people share there are insane. 20somethings sitting on crores worth corpus. Gives massive inferiority complex. I stopped following after a few weeks

Came across the reddit sub, but stopped following posts like this "I am 27 years old and current corpus is 5 Crores. Can I retire now, is this corpus sufficient enough to afford daal-chaval for rest of my life?"

[Sudarshan42]

Here's another line of thought- while focusing on a corpus makes sense, it would be more prudent to treat this as a rough ballpark (say a range of 4-7cr instead of adhering to 6cr for example) and instead plan to retire at a certain age. Reason I say this is because your post-FIRE years and what you do with the years left to you are as important as the years spent preparing for that life.

Example- I have a very rough idea of my target corpus itself, but a much clearer idea of when I want to retire. I want to retire by the age of 45 so that I have a good 15-20 years to do whatever I need to before old age sets in. I'll adjust my lifestyle according to my corpus; have more? Spend more. Have less? Be a bit more vigilant on expenses.

[capnemo]

First post on team-bhp is Personal finance related. Please forgive me car-gods.

I am working with a fee-only financial planner and we're working towards a fixed corpus of ~7 Cr after accounting for current corpus, needs and wants, and sufficient growth that will last us till we're 80 or so. Monthly expenses amount to ~60-80k and we have a home that will be paid off completely this year. I do want a good car (don't we all) post that, that is also accounted for. Current plans are targeting achieving this goal within 10 years if everything goes according to plan.

Although the calculations add up with this corpus, I'm still worried about inflation and lifestyle creep and personally striving for 2x of that figure. What that might probably end up involving is a substantial hike in salary levels (which might correspond with adverse work/life balance or elevated stress levels). Or an alternate source of income.

[BigB]

Sorry to play the badman here.

The poll is completely wrong. For me 5Cr may be enough, for someone else 50Cr may not be enough.

Right question would have been,
What is the ideal multiple of your annual expenses as your retirement kitty?

[p_darshi]

Originally Posted by Sudarshan42

I want to retire by the age of 45 so that I have a good 15-20 years to do whatever I need to before old age sets in. I'll adjust my lifestyle according to my corpus; have more? Spend more. Have less? Be a bit more vigilant on expenses.

I believe early retirement is the worst option for anyone. We work hard since childhood to get to a position which maximises our earning potential. And when you get there giving it up voluntarily is a disservice to ourselves

Instead there are lot of ways in which life can be enjoyed, while enjoying the benefits of high earnings.

As far as my calculations for corpus are concerned, I believe this question itself is flawed. It depends on your age group. If you are retiring tomorrow, then 3-4 crore is good, since it will provide 2-3 lakhs per month returns, enough to sustain and provide cushion. If you are retiring after 20 years, even 10 crores is insufficient.

[Sudarshan42]

Originally Posted by p_darshi

I believe early retirement is the worst option for anyone. We work hard since childhood to get to a position which maximises our earning potential. And when you get there giving it up voluntarily is a disservice to ourselves

Instead there are lot of ways in which life can be enjoyed, while enjoying the benefits of high earnings.

As far as my calculations for corpus are concerned, I believe this question itself is flawed. It depends on your age group. If you are retiring tomorrow, then 3-4 crore is good, since it will provide 2-3 lakhs per month returns, enough to sustain and provide cushion. If you are retiring after 20 years, even 10 crores is insufficient.

To this I say- to each their own. If maximising earning potential is your main goal, then you absolutely shouldn't retire at your peak. But if you treat earnings or money in general more as a means to an end than the main goal itself, which is how I look at it, then my plan makes sense to me. Let's go our own separate paths, there isn't a single blueprint for life anyway.

[charanreddy]

Have voted 7 CR, but that’s just a number. Also valid at this point in time. By the time I retire that number will be 30 cr (15 + years later hopefully). though the allure of early retirement interests me, I don’t have enough of an alternate interests to keep me occupied full time ( driving doesn’t count ). Also I plan to gradually become less intense and growth focused in the last 7 years or so in the interest of my mental and physical health. Obviously caveat around the best laid plans and all that.

I have recently started investing in mutual funds and have consulted a fee only financial planner. I intend to put some of the corpus inform of real estate (plots of land in reputed layouts) as this closely follows inflation. I am still trying to figure out how I can get my automotive itch scratched with all the above. Even a Toyota’s lifespan is not more than 15 years and it’s not just about buying a fancy car now, but to plan for one every X years.

[bwajlearn]

6 Cr is the number required for retirement when I did financial planning at 35 years age. This is for scenario where current monthly expense is 60K pm. Retirement age was set at 55 and I am in IT. It’s supposed to last till 95 years for last surviving member.

The investment amount will keep becoming small as years go. So when there is a surplus amount either by salary hike or bonus, I reduce the retirement age and increase the investment accordingly. This will help you avoid making impulse purchases. Once you reach the figure, you can play around with extra income.

I see medical expenses as the major unknown in all these calculations. So if you maintain good health, you will not need a big corpus.

[CarJunki]

Originally Posted by wildsdi5530

So by my calculations, yearly expenses will be Rs. 48 Cr. and for 30 yrs of post retirement life , Rs. 1.5 Lakh Cr would be an adequate corpus. Thankfully, Me and wife are both doctors so I will probably die with a knife in my hand, so I'm not trying to plan retirement which seems futile.

This by far is the most practical representation and calculation. I have noticed many retired pensioners having better purchasing power than others who are in initial pahses of their earnings. The reason being those government pensions are inflation adjusted every year to some extent.
For an individual who is not backed by currency printers, retirement is a falacy.

PS: Best placed are the ones who are retiring from judicial services in India.

[SoumenD]

Originally Posted by Latheesh

Came across the reddit sub, but stopped following posts like this "I am 27 years old and current corpus is 5 Crores. Can I retire now, is this corpus sufficient enough to afford daal-chaval for rest of my life?"

Hahhaaa. True. Most of them sound fake but there are a few genuine ones. What gets my goat is some people are so vigilant right from 21/22

Originally Posted by wildsdi5530

This seems very high looking at the numbers put froward by other members, and I should probably do this fire analysis.

So I think the best retirement policy is to educate your children, make sure they will take care of you in your old age, and pray.

You miss the most important point about early retirement. It means you stop working, not your money. You should be invested in equity to beat inflation. Please read about bucket strategy and watch some videos on the freefincal channel. At your current expense in today’s terms your corpus should be 9cr(distributed in equity and debt). If you just go by absolute numbers, you would need 100s of crores. In that case even after 60 you need to keep working.

Originally Posted by BigB

Sorry to play the badman here.

The poll is completely wrong. For me 5Cr may be enough, for someone else 50Cr may not be enough.

Right question would have been,
What is the ideal multiple of your annual expenses as your retirement kitty?

Correct. It all depends on one’s lifestyle. Based on that you can leanFIRE, fatFIRE or coastFIRE

[Sanjeev V S]

Hello,

I am 52 years young. I will work till I retire or when my manager fires me.

I have used formula again validated by me only. My approximate rounded number current living expenses is 1 lakh per month. Living debt free from 2009. I have 2 children.

My son just started working from Sep 2021 in Airbus after his BE. My daughter is now in Class X. I own 4 apartments in the same complex including the one I live in. I have zero debt.

My corpus on retirement day for my retirement years should be 40 times my current living expenses to factor inflation and higher maintenance is self and wife and homes. I have a gap which I am trying to reduce. Goal Vs actual.

I have invested separately for my children education and marriage. This is not part of the retirement corpus. Gold in 24K bars and silver bars have been procured for both the weddings.

I have invested in equity, mutual funds and have term, home, medical and life insurance for all at home.

I have 4x my annual income in emergency in liquid funds.

I have invested for home renovation too.

More or less it hits a magical number of 10 crores if we monetise everything. I am close to the number, working to close the gap as much as possible.

Many financial planners or retirement calculators miss a lot of expenses.

Hope my calculations come accurate.

Sanjeev
KA 05

[Sanjeev V S]

Originally Posted by BigB

Sorry to play the badman here.

The poll is completely wrong. For me 5Cr may be enough, for someone else 50Cr may not be enough.

Right question would have been,
What is the ideal multiple of your annual expenses as your retirement kitty?

40X of current annual expenses