POSTED BY December 18, 2010 3:57 am COMMENTS (3)ON
I understand the importance of planning for big goals in life and saving towards them (mine are: raising 2 kids, their college in another 12 years, thier marriage, and my retirement). I have some rough estimates of how much I may need for the kids.
When it comes to retirement savings, it is not very clear. The reason being I live in the middleeast and plan to settle down in India post retirement (say, 55 years). I have a decent living right now and will be happy to lead a similar or toned down life, post retirement. But since my post retirement will be in India how do I calculate how much savings should I have as I wouldn’t know how much would it be in rupees to lead a similar life in India that I lead now in the middleeast? I am now 35..
Need some enlightenment
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3 replies on this article “Retirement savings”
one quick and easy way to find out would be this
Step 1: Find out the monthy income you need today to get retired .
Step 2 : then inflate it to your retirement life and see how much it turns out to be with inflation .
Step 3 : Then find out how much money you will have to generate at the retirement which can give you that much monthly income for next 20-30 yrs incresing with inflation .
step 4: At the end you need to find out how much to start saving today which can give you that much return.
Now I leave it on you to do the maths which is not that easy , but not that tough also if you have strong desire to find things out !
Thank you very much for your replies.. with the retirement calculator, it does provide some numbers to work with and it does look intimidating to say the least :-). eg., If I put 30k as monthly sal and fill out other blanks with some conservative numbers I still end up somewhere between 3-5 crores (depending upon how I tweak the numbers)
But expenses at that time may be less isn’t it? eg., school or college fees may not exist.. I may not pay rent.. etc. Still a bit tied up in knots
It’s good at least you’ve started financial planning. You’ve now 20 years to plan your retirement life i.e. another about 30 years. To create wealth, the best way is to invest in equity diversified mutual funds via SIP. That will give twin benefits – power of compounding and rupee cost average. Invest lumpsum when market crashes.
Start with Reliance Regular Savings Fund – Equity, IDFC Premier Equity Fund, HDFC Top 200, HDFC Equity Fund.
To know the future value required, here is a link to retirement calculator.
Hope it will help you.