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41 yr old with 50K monthly expense wants to retire at 55 with 80 yr life expectancy. What's my retirement corpus?

Milind

Milind Vadjikar  | Answer  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 10, 2024

Milind Vadjikar is an independent MF distributor registered with Association of Mutual Funds in India (AMFI) and a retirement financial planning advisor registered with Pension Fund Regulatory and Development Authority (PFRDA).
He has a mechanical engineering degree from Government Engineering College, Sambhajinagar, and an MBA in international business from the Symbiosis Institute of Business Management, Pune.
With over 16 years of experience in stock investments, and over six year experience in investment guidance and support, he believes that balanced asset allocation and goal-focused disciplined investing is the key to achieving investor goals.... more
Asked by Anonymous - Oct 09, 2024Hindi
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Hi Vivek ji, I am 41 years old and want to calculate my retirement corpus. My monthly expenditure is 50K per month and I plan to retire at an age of 55 years. The life expectancy in my family is about 80 years. Pls help me calculate my retirement corpus. It will be kind of you to provide the calculations so that I can try out various possible scenarios by myself. Thanks in advance.

Ans: Hello;

Your current monthly expenses of
50 K would rise to 1.13 L in 14 years time by the time you retire.(6% inflation considered)

Therefore you would need a retirement corpus of 4.5 Cr invested in an equity savings type mutual fund(Moderate risk)

You may do an SWP at the rate of 3% which will yield you monthly income of around 1.13 L(Inflation adjusted expenses).

The corpus will keep on growing at a net rate of 6% after deducting 3% towards SWP.(A modest return of 9% pa is assumed from equity savings type fund).

After 25 years you will have a corpus of 19.82 Cr, after accounting for SWP withdrawals of 7.86 Cr spread over 25 years.

It will still yield monthly payout of 4.95 L to cover inflation indexed expenses at the age of 80 years for you.

You can use many online tools available for retirement planning to do your various calculations, as desired.

Happy Investing!!

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing.
Asked on - Nov 03, 2024 | Answered on Nov 04, 2024
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Hi Milind Sir, I went through your above answer on how to calculate a retirement corpus. The first point regarding the inflation adjusted expenses during time of retirement (1.13L in 14 years) is clear. However, in the above example, how did you arrive to the fact that the retirement corpus would be 4.5 Cr? Can you pls share the calculations for this point. Thanks in advance.
Ans: Sharing calculation is not possible.

Thank you for your kind understanding;
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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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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