I am 68 still working. How much corpus a person (I) required to live a decent comfortable retired life.

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.

Ans: Determining the corpus needed for retirement depends on various factors such as your desired lifestyle, expected lifespan, inflation, healthcare costs, and other expenses. Here's a general approach to estimate the corpus required for a comfortable retirement:

Calculate Annual Expenses: Begin by estimating your annual expenses post-retirement. This includes essentials such as housing, food, utilities, healthcare, transportation, and leisure activities. Don't forget to account for inflation, which typically ranges from 4% to 6% annually.

Determine Retirement Duration: Estimate your life expectancy or the number of years you expect to live post-retirement. This will help you calculate the total amount needed to sustain your lifestyle throughout your retirement years.

Account for Inflation: Inflation erodes the purchasing power of money over time. Factor in inflation when estimating future expenses to ensure your retirement corpus retains its value and can cover increasing costs over the years.

Consider Healthcare Costs: Healthcare expenses tend to rise with age. Account for medical costs, including insurance premiums, routine check-ups, medications, and potential long-term care expenses, which can be significant in later years.

Include Contingency Fund: Set aside an emergency fund to cover unexpected expenses or financial setbacks during retirement. Aim to have at least 6 to 12 months' worth of living expenses readily available in a liquid account.

Evaluate Additional Income Sources: Consider any additional sources of income during retirement, such as pension benefits, rental income, annuities, or part-time work. These can supplement your retirement corpus and reduce the burden on your savings.

Consult with a Financial Advisor: It's advisable to consult with a financial advisor or retirement planner who can assess your specific financial situation, goals, and risk tolerance. They can help you create a personalized retirement plan and determine the optimal corpus needed to achieve your retirement objectives.

Regularly Review and Adjust: Once you've established a retirement plan and accumulated your desired corpus, periodically review and adjust it as needed based on changes in your lifestyle, financial goals, market conditions, and other relevant factors.

While there's no one-size-fits-all answer to how much corpus you need for retirement, aiming for a retirement corpus that can cover your anticipated expenses comfortably, along with a contingency fund and additional income sources, can help ensure a financially secure and fulfilling retirement.

Ans: It's great that you're thinking about your retirement and planning ahead. Here are some steps to help you determine how much money you'll need to retire comfortably:

Calculate Your Retirement Expenses: Start by listing down all your current monthly expenses, including essentials like housing, utilities, groceries, healthcare, and discretionary spending. Add an inflation buffer to estimate future expenses.
Determine Your Retirement Age: Decide at what age you want to retire. Since you're 45 now, consider how many years you have until retirement.
Estimate Your Retirement Income: Assess all potential sources of retirement income, such as pensions, annuities, Social Security, and investment income.
Calculate the Gap: Subtract your estimated retirement income from your projected retirement expenses to determine how much additional income you'll need from savings and investments.
Determine Required Corpus: Once you have the annual shortfall in retirement income, multiply it by the number of years you expect to be retired. This will give you an estimate of the total corpus required to cover your retirement expenses.
Adjust for Inflation: Remember to account for inflation when calculating your retirement corpus. Inflation can erode the purchasing power of your savings over time, so it's crucial to plan for it.
Consult a Financial Planner: Consider seeking guidance from a Certified Financial Planner to help you create a personalized retirement plan. A professional can provide valuable insights and recommendations tailored to your financial situation and goals.
By following these steps and consulting with a financial planner, you can determine how much money you'll need to retire comfortably and develop a strategy to achieve your retirement goals. Remember, it's never too late to start planning for retirement, and taking proactive steps now can help secure your financial future.

Ans: It's fantastic that you're planning for your retirement. Starting to think about it at 55 shows foresight and responsibility.

Understanding how much you'll need for a comfortable retired life is crucial. We'll evaluate your current expenses and projected lifestyle to estimate your retirement corpus.

Your current monthly expenses of 2 lakhs are a good starting point. Considering inflation, we'll project how much you'll need at retirement.

Based on a conservative estimate of a 6% inflation rate, your expenses could double every 12 years. So, after 5 years, your expenses might be around 41 lakhs annually.

To maintain this lifestyle for 30 years of retirement, we estimate a corpus of approximately 12.3 crores.

This estimation doesn't include investment returns or taxes, so it's wise to consult with a Certified Financial Planner for a detailed analysis.

By diligently saving and investing, you can work towards building the required corpus for a worry-free retirement. Keep up the good work!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in