Planning for Retirement
Retirement planning is about ensuring you have enough money to maintain your lifestyle when you stop working. The earlier you start, the less you need to save each month.
Key Concepts
- Corpus: The total amount you need at retirement
- 4% Rule: Safe annual withdrawal rate from corpus
- Inflation: Erodes purchasing power over time
- Real Returns: Returns minus inflation
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The Power of Starting Early
Starting at 25 vs 35 can mean saving 50% less monthly for the same corpus. Compounding needs time to work its magic.
Sample Retirement Math
| Start Age | Monthly SIP | Corpus at 60 |
|---|---|---|
| 25 years | ₹10,000 | ₹5.3 Cr |
| 30 years | ₹10,000 | ₹2.8 Cr |
| 35 years | ₹10,000 | ₹1.5 Cr |
Retirement Investment Strategy
- 20s-40s: Aggressive equity allocation (80-100%)
- 40s-50s: Balanced approach (60% equity, 40% debt)
- 50s-60: Conservative shift (40% equity, 60% debt)
- Post-retirement: Capital preservation focus