The document discusses the importance of retirement planning. It notes that people often prioritize spending over saving for retirement. Retirement planning is crucial because lifestyle expenses will increase significantly with inflation over decades. Medical costs alone could increase over 10 times with inflation factored in. The document uses an example to show that for monthly expenses of 1 lakh currently, the required retirement corpus to maintain that lifestyle would be over 30 crores accounting for inflation over 30 years until retirement at age 65. Proper retirement planning through disciplined long-term investing is necessary to achieve adequate savings for retirement.
2. Why we need to plan ?
Its risky to die early, but its more riskier to live long.
3. People change the basic principal
EARN – SAVE = SPEND
and now……
Life is not easy …
4. EARN – SPEND - EMI = ???
Life is not easy …
Don’t confuse with
“Spending for Life”
Or
“Life for Spending”
5. What Come First ?
Plan for Child Education
Plan for Child Higher Education
Buying a new house property
Foreign Tour
Plan for Child Marriage
Retirement Planning
7. Why we need to plan for Retirement ?
Generation Gap
Changes in Life Style
Increasing Inflation – The new Demon
Increase of Medical Expenses
Absence Social Security System
8. Generation Gap
Absence of Joint Families and Business
Less Dependency
Parents support us and we support parents
Diminishing value of culture and respect
9. My dad had one pair of shoes and used it
for five years. I have five pair of shoes and
use it for one year.
In today’s wired world people connect
less emotionally more electronically.
High stress level.
Ever changing Lifestyle…
10. Inflation
If you have expenses TODAY
Rs. 1,00,000/-
Per month
The value after 35 years…..
(with Inflation of 8%)
11. Inflation
Rs. 14. 78 Lacs
Per month
Rs. 1.77 Crore p.a.
(Just to maintain the same Life Style)
12. Increase in Medical Expenses
Name of Treatment Cost TODAY Cost after 15 years Cost after 30 years
Dr. Fee for Check-up 1,000 3,172 10,063
Heart Surgery 3,00,000 9,51,651 30,18,797
Lever Transplant 33,00,000 104,68,158 332,06,768
Orthopedic Surgery 3,00,000 9,51,651 30,18,797
Catract Surgery 75,000 2,37,913 7,54,699
Open Heart Surgery 5,00,000 15,86,085 50,31,328
Spin Surgery 3,00,000 9,51,651 30,18,797
Inflation 8%
13. Retirement Corpus
A Corpus you need to build in
your accumulation phase (30 years
to 65 years) so that you enjoy your
distribution phase (After 65 years
till you live).
14. How to create and how much is enough ?
It’s a very difficult task to find out the magic number. We need to consider the
followings aspects to find out the same:
Expenses which will come after Retirement (Ex. Medical Expenses, Gifts etc.)
Expenses which will not be there after Retirement (Ex. Loan EMI, Child
Education)
Provision for High Medical Emergiencies
Number of dependent and Inflation
15. Find the Magic Number…
Lets understand it with an
Example.
Meet Mr. Rajesh (Age 35). He has
a myth that “My PF and all my
pension plans are enough to take
care of my retirement.”
16. Find the Magic Number…
Facts:
1. Monthly Expenses (Other then loan EMI) – Rs. 1 lac per month.
2. Food Inflation – 8%
3. Age of Retirement – 65 years
4. Savings till now for Retirement -
1. PF Account Balance – 5 Lacs ( Invest 2,50,000/- p.a.)
2. PPF Account – 3 Lacs (Invest 1,00,000/- p.a.)
17. Find the Magic Number…
Calculate:
1. Monthly Expenses at the age of 65 years – Rs. 10 Lacs per month
2. Annual Expenses (65 years) – Rs. 1.20 crore.
We need to create a corpus at the age of 65 which can give you monthly income of Rs. 10
lacs per month (tax free).
If we assume 4% tax free rate of return, then we need a corpus……
19. Retirement Corpus
Corpus we need for monthly expenses – Rs. 30 crores
Increase:
Provision for Medical Emergencies
Present – 10 lacs
A the age of 65 years – Rs. 1 Crore.
20. Retirement Corpus - Planning
IF YOU DIE EARLY
A good and decent Term Plan to cater your
needs.
IF YOU DON’T DIE EARLY
Discipline approach towards investment.
21. Future is always unpredictable …
We never know what come next.
So always be cautious and
updates about latest
happenings…
22. Final Note…
Plan Today for Better Tomorrow.
The best age to start for your retirement is
either 20 or NOW
Stick to basic, basic is always beautiful.
Always educate your kids about our
inheritance values, cultures and roots.
Don’t forget to prepare your WILL.
