WHY RETIREMENT CORPUS IDEAS NEED REVIEW

THIS Diwali, for most people in their 50s, the conversation centred around retirement. The moot point of discussion was ‘how much is enough’ to retire. It is a topic of discussion among the upper-middle-class and middle-class people.

- RAJAS KELKAR

For a long time, Rs 3-4 crore was considered a safe amount. However, many conversations are drifting higher towards the ₹10 crore mark. These are primarily the upper-middle-income households. There is a significant increase in lifestyle-related expenditures among wealthy households. Many top executives in their 50s want to maintain the ‘lifestyle’ momentum well into their 60s.

A lot of estimation is based on thumb rules. For example, you can withdraw 4% of your retirement corpus each year without depleting your corpus. The other one concerns the inflation assumption and the compounded annual growth rate of the investment return. The average inflation rate is assumed to be 6% for the foreseeable future, and the average return is set at 10-11% per annum. Most of you want more money in your hands to live the life you wish to live with your hard-earned savings and investments.