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Retirement Planning in modern times – Part-1

The concept of retirement planning is fast changing in the recent days. Gone are the days where everybody works upto the age of 60 , gets a decent pension/PF/Gratuity and lives rest of his life on this income. This was possible because of assured returns and relatively low inflation. Now lots of changes are happening in retirement planning.

Retirement Planning

  • Lot of  employees prefer to retire early due to high work pressure and related stress. They want to live a stress free life after retirement, which was not possible during the working period.
  • Most of the employees are not getting  a  guaranteed pension. PF accumulations are withdrawn and consumed during change of jobs and gratuity may/may not  be available depending on the service conditions.
  • Returns on investments have come down and pensioners will find it difficult to live only on interest income.
  • Longevity has increased and a retiree lives for a longer period, in some cases, even more than his service period.
  • Inflation is on the higher side and purchasing power is coming down drastically.
  • Most of us are thinking that retirement planning can be done at the advanced age of 40 -45.But this is the biggest mistake in retirement planning.
  • Modern life style is creating a lot of diseases which require to be treated. Medical costs are increasing higher than the general inflation which makes life difficult at advanced stages.
  • Joint family system is almost disappearing and nuclear families are on the rise. Children are staying away for better job opportunities, so retirees can no more be dependent on them. In the absence of any government sponsored retirement income, it has become a great concern, how to create our own retirement income. 

But we can overcome all the above issues and can create a good income for our retirement and  have a decent life after retirement if we follow a disciplined savings pattern during our working span.

Retirement Planning – Steps

  1. Find out how much you need after retirement in the current value. This requires an analysis on how the requirement changes after retirement. Your expenses for children education, their marriage, home loan EMIs etc. will be over by the time you retire. Assume that children are settled and staying separately. You have to provide for a driver, house maid and extra medical cost during this stage. An above  average urban family of 2 (husband and wife only) requires around Rs. 30000/pm in the current situation if they have their own house to stay. Depending on the life style, you are maintaining now, it can be lower or higher.
  2. Now let us see how to calculate the retirement requirements

Assumptions: Current age – 35, Retirement age – 55, Life expectancy- 75 years. Post retirement  Investment Return – 2% above inflation (mainly in conservative debt investments)

Retirement Planning-Expense Assumptions

Monthly Expenses after retirement in current value-Rs. 30000/pm

Value of Rs. 30000/- at 6 % inflation after 20 Years-Rs. 96000/- pm

Amount required at age the age of 55 to ensure inflation adjusted monthly expenses  to ensure same standard of living upto the age of 75-Rs. 1.9 Cr

Retirement Planning Calculator by Moneycontrol

Don’t get alarmed by seeing the huge amount required. There are ways and means to reach this by systematic and disciplined savings during the next 20 years. We will continue this topic in the next mail.

Have you done Retirement Planning for yourself???


  • r.k.singh Posted June 7, 2011 1:27 pm

    Please send the details of good retirement plan i am at the age of 44 and my income is per month 70,000.00 and my wife also draw 17000/pm.
    with regards

    • Finvin Posted June 7, 2011 6:13 pm

      I can give a clear answer, only after understanding details on your retirement age,current savings,any other liabilities such as children education/marriage, any loan outstanding,your retirement benefits etc.
      If I give, a general answer, it may not suit your unique needs. Please provide these details to my email address –

    • Mohan Sharma Posted June 8, 2011 9:23 am

      I can provide you guaranteed pension plan. Policy is without any Insurance cover. It means no mortality charges and having good returns. In the event of any mishappening with the Policy Owner nominee gets back all the premiums paid alongwith annually compounded interest of 10 %. To discuss require a meeting. You can call me on 9810201787. We also provide other solution too.

      • Finvin Posted June 8, 2011 11:55 am

        Normally, in any guaranteed plan, the returns will be very less, because of the investment style.Which plan, you are recommending?

        • Mohan Sharma Posted June 8, 2011 1:04 pm

          Aviva’s Pension Builder.

          • Finvin Posted June 18, 2011 5:42 pm

            Aviva Pension Builder guarantee 2 times the premium paid. The CAGR works out to around 7%, which is not great. Conservative investors can go for PPF which offers 8% with government guarantee. A balanced fund can easily give 12% return on long term, which will be better than any insurance related pension plan. Avoid Aviva plan.

  • Sanjay kumar Posted June 18, 2011 5:06 pm

    I am 34 years old. I am earning Rs 70,000 pm.
    I am paying 10,000 EMI for old home.
    I am purchasing new flat of Rs 40 lacs. Which will cost me EMI of Rs 30,000 after 2 years.

    In which plan I should invest.
    I have no saving except PPF of Rs 2.5 lacs

    • Finvin Posted June 18, 2011 5:15 pm

      Dear Sanjay, It is good that, you started thinking of saving now other than real estate. It is always better to diversify other than real estate to ensure liquidity and faster growth.Mutual funds will be the better option for you.But investment has to be goal oriented.Unless, I understand your basic details, financial goals in life any suggestion in isolation will not be complete. Being a Financial planner, I advice you to get a financial plan from an independent financial planner, who will protect your interest.We at Finvin, offer this service online at an annual fee of Rs.1499/-. If you are interested, please visit our website and cklick on CONTACT US.

  • Mohan Sharma Posted June 19, 2011 1:34 pm

    Dear Sanjay,

    I am Certified Financial Planner. To provide you solution to your need require a meeting. You can mail ( or me your mobile number so that I can get in touch with you. Alternatively you can call me on 9810201787.

    Mohan Sharma

  • SURESH BABU Posted June 30, 2011 1:06 pm

    dear sir,
    We are very much thankful to you for the support you are providing by saying facts about life after retirement.
    I am 40 Years old and earning 70, 000/- per month. I got married and having 2 children of 5 and 3 years old.
    Can you please sujjest me what should I do for better retirement life by considering children educational requirements upto settlement.
    regards – suresh

    • Finvin Posted June 30, 2011 1:18 pm

      If you want to properly plan for the retirement, I require some more details like your current savings/monthly house hold expenses/educational expenses to be provided for etc. This requires a Comprehensive Financial Planning. Any recommendation in isolation will not be correct.

  • debashish mandal Posted December 21, 2011 5:38 pm

    Kindly keep me posted for retirement related investment newsletters. I urgently need to invest in instruments. thanks

  • Somenath Paul Posted January 19, 2012 1:04 pm

    Please keep me posted for Retirement planning. Presently, I am of 41yrs. I plan to do something after this financial year is over.

    • admin Posted January 19, 2012 1:18 pm

      You want us to do a comprehensive financial planning for you which covers retirement planning also? Please respond?

      • B.N.Vinu Posted December 7, 2012 9:34 am

        I am 56 years old & getting retired after 4 years, i.e. when I am 60 years old. My present Monthly expense is Rs. 30000/. I have a 19 years old daughter who has to get married after 6 years. My Present monthly income is Rs. 200000/. Please give me a suitable Pension plan.

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