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What Retirement Corpus Do I Need at 51 with Rs.75,000 Monthly Expenses?

Ramalingam Kalirajan |6995 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Question by Venkat on Jul 09, 2024Hindi

Money

I am 51 now and want to retire now. What should be retirement corpus i need if my current monthly expenditure is 75000.

Ans: You want to retire now at 51. Your current monthly expenditure is Rs. 75,000. Let's determine the retirement corpus needed.

Inflation Consideration
Consider inflation, which will increase your expenses over time. Assuming an average inflation rate of 6%, expenses will double in about 12 years.

Longevity Planning
Plan for a retirement period of 30 years. This ensures you have enough funds even if you live longer.

Safe Withdrawal Rate
A safe withdrawal rate is around 4% per year. This helps preserve your capital while providing regular income.

Calculating the Corpus
To generate Rs. 75,000 monthly, you need Rs. 9 lakhs annually. With a 4% withdrawal rate, the corpus required is Rs. 2.25 crores.

Investing for Retirement
Invest in a mix of equity and debt funds. Actively managed funds provide better returns than index funds. Consult a Certified Financial Planner for tailored advice.

Healthcare and Emergencies
Set aside funds for healthcare and emergencies. Health insurance and an emergency fund are essential.

Reviewing and Adjusting
Regularly review your investments. Adjust them based on market conditions and personal needs.

Final Insights
A corpus of Rs. 2.25 crores should be adequate for your retirement. Focus on inflation, longevity, and a safe withdrawal rate. Invest wisely and review regularly.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Asked on - Jul 16, 2024 | Answered on Jul 17, 2024

Thank you. Can you please connect with me individually to guide me on investment planning

Ans: I appreciate your trust and willingness to connect.
Let's embark on this financial journey together.
You can reach me through my website mentioned below.
This platform has restrictions on sharing personal contact. Hope you understand.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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Dear sir,I am currently 49.5 years old with monthly expenses of Rs 2.15 lacs,how much corpus should I have to retire peacefully, regards

Ans: To determine the corpus required for a peaceful retirement, several factors need to be considered, including your current age, monthly expenses, life expectancy, inflation rate, expected returns, and desired retirement age.

Current Age - 49.5 years
Expected Retirement Age - 60 years
Life Expectancy - 80 years
Current Expenses - Rs. 25,80,000 p.a.
Value of current expenses at the time of requirement (Inflation Rate - 6%) - Rs. 9,67,83,692
Amount Required to be invested today to meet the expenses - Rs. 3,37,68,407 (Expected rate of return - 10%)

Based on the given assumptions, with an inflation rate of 6%, you would need a corpus of approximately Rs 3.4 Crores to retire comfortably and maintain your current lifestyle. This amount would be sufficient to cover your annual expenses throughout your retirement years, taking into account inflation and expected returns.

The returns expectations may vary depending upon the equity:debt allocation determined on the basis of risk profile and other related parameters.

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Dear sir,I am currently 50 years old with monthly expenses of Rs 2.60 kacs,how much corpus should I have when I retire at 58 years to sustain my current lifestyle?

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Question by Rajiv - Feb 12, 2024Hindi

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Dear sir, I am 50 years old with current monthly expenses of Rs 2.60 lacs,I will retire at 58 years,what retirement corpus should I have at 58 years to last for a life span till 100 years ?

Ans: To secure a comfortable retirement with a corpus that can sustain you till the age of 100, several considerations come into play. At 50, with monthly expenses of Rs 2.60 lakhs, targeting a retirement age of 58, the goal is to ensure your corpus lasts 42 post-retirement years.

Given life expectancy and potential healthcare costs, it's wise to plan for a longer retirement. As expenses tend to change, you might see some reductions in post-retirement years, like commuting costs. However, healthcare and leisure expenses may rise.

To build a corpus that can generate a monthly income of Rs 2.60 lakhs (adjusted for inflation) for 42 years, the corpus needed can be substantial. It's essential to have a diversified investment strategy with a mix of equity, debt, and other investment avenues to beat inflation and generate steady income.

Given these factors, starting a systematic investment plan (SIP) tailored to your risk appetite and consulting a financial advisor can help create a realistic and robust retirement plan.

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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