[fhdowntheline]

There is one important factor of investing for retirement. Usually amongst the salaried class, the amount of disposable income rises after a number of years in the job. So one has to look at progressively allocating higher( lumpsum) amounts for investments in the late 40s or so.

[Transmission]

Originally Posted by SR-71

Useful responses are worth rambling about :-). I would encourage you to share valuable pointers even if it means multiple posts over multiple days.

I'll try writing another reply post tonight - building on top of my last comment. Been a busy time so not quite finding the time to wind down and get into these things

[dipak1406]

Would like to make a humble suggestions. Experts please review and guide appropriately

Option - 1

This is for those who have their own apartment which was purchased long time back and the location is in prime area or nearly prime area, price has appreciated considerably and rent is decent

Will suggest one buys real cheap 2nd apartment just outside the Big City so that you can commute easily in case of emergency

So when one retires, they shift to a bigger Apartment just outside big city and enjoys Rental income.

My neighbor who is a Teacher gets rent of Rs 24000 per month. She had purchased this apartment in 1992 at Rs 2.85 lacs. She continues to hold as she is dependent on small Pension + rent which is sufficient for her in Andheri, Mumbai.

eg. For Mumbai - 2 BHK at Vapi prime area will cost about 18 to 24 lacs - from here one can easily drive to Virar station in 35 minutes and catch local to travel any where in Mumbai

For Delhi - 2 bhk at Ghaziabad in good areas are still going cheap - Crossing Republik is 12 kms from Anand Vihar which is delhi border, connected with 12 lane NH 24 and apartments here cost about Rs 26 to 35 lacs

Option - 2

here most of us have missed the bus but if you can invest for your children and grand children.

My office colleague is 60+ years old (lady) and is Personal Assistant to Director drawing meager salary of Rs 35000 per month

He mother was also a stenographer once upon a time and expired at age of 90 years plus.

One should be aware that in 1960s and 1970s, salary was in range of Rs 75 to Rs 175

My colleague's mother started purchasing Shares and never sold them. When she expired 2 years back, she willed her Flat to Son and her Equity Holding was divided 60% son and 40% daughter.

My colleague showed me Demat statement and when we calculated, the value of just 40% equity was amounting to Rs 3.71 crores.

She asked me to guide her as the amount was substantial. Told her to learn from her mother and continue holding

Take Care and Thank you

[SN88]

My parents (both worked all their lives until 65) toiled and worked their way up and one of the smartest things they did was buying property (different parts of Mumbai and Pune, city, suburbs, even outskirts and diversified the property portfolio) whenever money was saved.

Dad never kept too much liquid cash thinking about uncertainty etc. He was a risk taker and never believed keeping money in the bank as it was too easy to withdraw and makes one stop thinking innovatively if there was a cash crunch. All properties have been on rent as he got possession.

Now he is 70 and has made gift deeds for us 3 children distributing it evenly for all 3. We all 3 siblings have properties worth approx 5 crores each. Some are habited by us and some on rent. He doesnt have much liquidity now for emergencies but that is what his kids are for!! He is pretty chilled now.

A thousand thanks to them for planning meticulously and because of it we have so much lesser stress than we would if we werent gifted by what they did.

I hope and pray I do the same for my kids!!

[Nissan1180]

Looking at the numbers on this thread can make for an alarming read. A large section of the white collared workforce in India is employed in jobs that pay between 10-40k a month. It is impossible for someone to save substantially. It looks like most of us won’t be able to retire, or will face financial challenges as we grow older.

[jkrishnakj]

And I thought I’ll aim for 7, be happy if I get 5 and retire in a decade. And then I saw the post speaking to 1.5L cr number or the 30 cr per month. Gosh! If I ever need so much, I don’t want to see a single day after retirement.

I got a decade left at work (assuming retirement age is 60). I still have a car and home loan to pay.

I’m fairly comfortable with the spread of real estate, MF, PF, SGB, FD and equity baskets that I currently have. Well, I might not continue living at Bangalore then, but that’s a call I’ll need to take later.

[vijaykr]

I feel the perspective we can take here is - it will take a lot more money to continue a future retirement lifestyle similar to today. And the way to get there is to start at the earliest to save as much as possible given each individual's circumstances and reasonable needs.

At the risk saying the obvious, I am sure most of us realize the retirement corpus number arrived at after appropriate extrapolations should serve as the goal to target rather than - if I get there, I am set for retirement or if I don't make the number, I am going to struggle after retiring.

The importance of the number is to get into the saving habit towards a defined objective instead of a generalized retirement idea. The younger one is able to start on this path of working for a specific retirement target, the higher chances one will get there. Note I am not talking about the investment avenues to make the retirement corpus, but the discipline itself that having this goal will likely instill in us and give meaning to why we should be saving consciously.

Personally for myself, I wish I had the wisdom the understand this twenty odd years ago when I was spending all the money I was making and maxing out my credit card. But I was lucky enough to course-correct in the last decade of so and now close enough to what I believe is my requirement for retirement. Only time will tell the success of my plan

[thanixravindran]

My 2 cents on this topic -

I think all of this amount in Crores listed in the poll (Be it Cash, FD, MF, Stocks, may be property) is intended to be liquidated or be useful during those 25 golden years for expenses. For people who used to have the cash flow running (the monthly SMS you get on salary credit), no amount of retirement kitty will be enough. Typical Indian family mindset is to save, invest and pass the Capital assets to the Next Gen even during retirement. So I did not voted.

The biggest hurdle I see for the current gen is the lack of monthly pension that private sector employees could get at the retirement like Government employees. So this means they will end up doing something (freelance, advising, consulting, Stocks, MF, FD, or even small shops) to get the cash flow running. I presume the SWP is to address this with MFs in a better way or most will end up with the annuity plans with their pathetic returns. I sincerely wish NPS become attractive enough to take the pressure off this retirement planning nightmare.

On the topic of real estate for retirement, I believe one should have second property that one should plan to live at the age of 50 to 55 (closer to retirement). Primary reason is if you have invested in a apartment at the age of 25 to 30 (now a days this is the norm), the property itself will be old by 30 years at time of your retirement (55 to 60 years) though the value would have increased on paper.

Gone are the days when property will easily last for 50 to 60 years. Given the quality of construction now a days, it will need redevelopment at the time of retirement but most original owners cannot put money to redevelopment. This means again ending up with builder nexus and joint venture is the way to go with reduced share.

So if you get a property (or second one) at 50 to 55, it will last your lifetime and next generation can decide what to do with the real estate based on their choices.

[sunilch]

Originally Posted by Nissan1180

Looking at the numbers on this thread can make for an alarming read. A large section of the white collared workforce in India is employed in jobs that pay between 10-40k a month. It is impossible for someone to save substantially. It looks like most of us won’t be able to retire, or will face financial challenges as we grow older.

Yes, the numbers here are very much impractical for 2/3rd of the population I believe, if not more. Many in my family circle earn under 50K per month as a collective family and are still very happy with what they have.

The only issue for them is they don't have the luxury to retire early. But I am sure they don't care for that as long as they don't suffer from anything serious on health front. They are happy to work as long as they can. Many are flexible in terms of what they can or want to do. So getting a job with similar pay scale isn't a big issue for them again.

It appears that folks who are voting for 5-7-10+ Cr as retirement kitty are planning to live on the returns generated by that amount as opposed to using that amount as well. This is simply a wrong way to plan as the calculated number will always feel small/not enough or too large to achieve.

So I personally believe all these extrapolated numbers are not very useful as there is no end to what/how much you can extrapolate. If you are a bit realistic in your calculations, you can have peace at night and stay happy. Otherwise this is nothing but another way of increasing stress in your already stressful life.

Originally Posted by jkrishnakj

And I thought I’ll aim for 7, be happy if I get 5 and retire in a decade. And then I saw the post speaking to 1.5L cr number or the 30 cr per month. Gosh! If I ever need so much, I don’t want to see a single day after retirement.

I got a decade left at work (assuming retirement age is 60). I still have a car and home loan to pay.

I’m fairly comfortable with the spread of real estate, MF, PF, SGB, FD and equity baskets that I currently have. Well, I might not continue living at Bangalore then, but that’s a call I’ll need to take later.

The number you have quoted is quite a good number except when you want to spend in multiple lacs every month.

I am way younger than you, having multiple liabilities (financial and other) which may blow up anytime. Despite that, if I had 5Cr today in liquid assets and no or net zero liabilities, I would stop working at my job today itself. This amount can help me in living for next 40 years without any issue at my current expenses/lifestyle with inflation accounted (extrapolated) for. Alas, I have a very long marathon to finish before I can get a sigh of relief

Looking at your recent posts, I believe you are doing quite good. So I am happy for you But leaving Bangalore may not be the best option to choose. I feel that our monthly minimum cost of living is not that high in a Metro when compared to a Tier-2 city. Only if you move to a Tier-3 city or a rural area, the monthly living cost may go down. We won't eat a lot less or a lot more, won't consume electricity in disproportionate quantity after retirement. These expense will not differ by a large margin. The only expense that may change drastically post retirement is Fuel costs. If you drive daily today, you will save a lot on fuel. If you don't drive daily today, your monthly fuel expense may increase a lot post retirement.

[jkrishnakj]

From the experiences I’ve seen across many a corporate friends and colleagues, I have reasons to believe that the ages 35-50 are potentially the most high earning times. I wonder what will motivate someone at 35 or lesser to call it ‘done’.

That said, I guess the only reason I continue is because I quite haven’t figured out what I’ll do, if I don’t keep busy with my current corporate world. I’m sure I’ll figure this out soon.

[Red Liner]

Originally Posted by jkrishnakj

I wonder what will motivate someone at 35 or lesser to call it ‘done’.

.

Stress that leads to bad habits and health complications. All you need is one heart attack and an angioplasty at 35 to course correct. All these retirement kitties are of no use if your mental and physical health are in the doldrums.

[Amey Kulkarni]

The inflation is making our salaries look poorer day by day. I personally won't keep any figure in mind as a kitty. More the merrier. Having said that, I don't want to be starving today for a better tomorrow.

Keep the lifestyle that your parents have shown as a baseline and work towards it or beyond.

I always believe that there needs to be a balance of life. Save for tomorrow but don't forget to live today.

And in addition, its not only the kitty but also the close friends who're going to play a vital role to enrich your mid-age / retirement life.

Cheers,
Amey

[shankar.balan]

Here is a Swedish/ Nordic Spin to this (literally) multi-million dollar question.
https://bigthink.com/thinking/swedis...m-just-enough/

[SanSabh]

Originally Posted by shankar.balan

Here is a Swedish/ Nordic Spin to this (literally) multi-million dollar question.
https://bigthink.com/thinking/swedis...m-just-enough/

Exactly what we all should strive for. However, there's still a number involved

And that number is dictated by one's corpus

Essentially, if the corpus is sufficient and well invested, and the goal is to keep it that way, one can spend, in percentage terms

Return - Inflation = Spend

If the goal is to grow the corpus, just spend less. Or strive to increase the Return rate

My personal assumption about Inflation is ~10%. So if the Return is 15%, one gets to spend 5% per annum

Considering that the minimum requirement for a dignified Middle Class life is, say, 30 lakh per annum in the present day, one will need a corpus of 6 crore

Just thinking aloud. Everyone's requirements are different. So are the perceptions of Return rate and Inflation

[deep_bang]

Originally Posted by SanSabh

My personal assumption about Inflation is ~10%. So if the Return is 15%, one gets to spend 5% per annum

Considering that the minimum requirement for a dignified Middle Class life is, say, 30 lakh per annum in the present day, one will need a corpus of 6 crore

Just thinking aloud. Everyone's requirements are different. So are the perceptions of Return rate and Inflation

Going by your own calculations, there is one more parameter to consider. That is timing of retiring. Your calculation is correct if one is retiring today. But it's more likely that to plan for retirement, one should know this number a decade or more before retiring. So we need to factor that too. For example, if I were to retire 7 years later, I would probably need 60lakh per annum to maintain the same lifestyle. That means my corpus would have to be 12 Cr.

So my first point is, for all parameters being same, the corpus depends on 'when' you want to retire.

My second point is, as you have mentioned, you can spend 5% per annum assuming inflation is always 10% and return is always 15%. But this 5% also needs to increase over time else, it will become hard to sustain. So the corpus increases further.

My third point is, one doesn't necessarily need keep the principle intact until he/she dies. One can actually eat into the principle too, the idea being there is no use of money after death. This calculation will bring down the corpus.

So, I belive the corpus calculation should take care of all the above 3 points. Then you will have a perfect calculation. (And still things will change).