Drifting into the golden years of retirement should be as soothing as the early morning raga echoing through the ghats of Varanasi. But to enjoy that calm, your financial boat should be sturdy, so you don’t find yourself lost in turbulent waters.
Firstly, understanding how much you’ll need in retirement is rooted in knowing your current expenses. Let’s say, for simplicity, your annual expenses right now are ₹6,00,000. By the time you reach retirement, given the inflation, especially in India where we usually account for an inflation rate of 6-7%, this number will be significantly higher.
For a safe retirement, it’s commonly recommended to have saved about 25 to 40 times your annual expenses. Why this range? Because 25 to 40 times is like the bedrock, it keeps you grounded. If you’re more conservative, lean towards 40 times, as it offers a cushion. So, if we take ₹6,00,000 as your annual expense, you should aim for a retirement corpus between ₹1.5 crores to ₹2.4 crores.
Now, while the figures might seem daunting, remember what Warren Buffett said: “Do not save what is left after spending, but spend what is left after saving.” It’s the little steps taken today that will ensure a smooth sail tomorrow. Start investing wisely now, focusing on consistent saving and smart investment choices. If you lean on instruments that offer a balance of safety and growth, in line with the LSG framework, you’re on the right track. Derivative trading and other high-risk avenues? Not the best companions for this journey.
To sum up, while your age is a factor, your expenses and lifestyle choices play a pivotal role in determining your retirement corpus. Make informed decisions, revisit them periodically, and remember that consistency is key. If ever in doubt, Jama Wealth’s PMS services can provide direction to ensure you stay the course.
