Sure, let’s start by calculating the inflation-adjusted salary, and subsequently the retirement corpus.
Assuming an average annual inflation rate of 4%, your salary of INR 1.5 Lakh pm today would be approximately INR 3.24 Lakh pm in 2043. The exact future value can be calculated using the formula:
Future Value = Present Value * (1 + Inflation Rate) ^ Number of Years
Next, we calculate the retirement corpus. A general rule of thumb is to accumulate a corpus that is 25 times your annual expenses at the time of retirement. This rule is based on the 4% safe withdrawal rate, which is a guideline that suggests that you can withdraw 4% of your portfolio each year in retirement without incurring a substantial risk of running out of money.
So, if your monthly expenses are INR 3.24 Lakh at the time of retirement, your annual expense will be 3.24 Lakh * 12 = INR 38.88 Lakh. The retirement corpus you would need will be 25 * 38.88 Lakh = INR 9.72 Crores, round it off to say Rs 10 crores. Please note that these calculations are rough estimates and actual figures may vary based on various factors like changes in lifestyle, unexpected expenses, changes in inflation rate, etc.
To accumulate such a corpus, it is crucial to invest wisely. Based on your age and retirement goals, it would be advisable to have a balanced portfolio with a good mix of equity and debt. Since you have a long-term horizon, investing in equity through mutual funds or direct stocks can provide the benefit of compounding and the potential for higher returns; choose a good stock portfolio or PMS from a trust worthy advisor.
Your exact asset allocation should be based on your risk tolerance and financial goals. Always remember, it’s not about ‘Keeping Up with the Sharmas’ but about planning for your financial security and peace of mind in the long run. Regularly review and adjust your financial plan as necessary to stay on track with your retirement goals.
Lastly, it’s recommended to consult with a SEBI Regd investment advisor to get a personalised investment plan.
