Even with "zero" savings, you can enjoy post-retirement life with Rs 2 crore, this is how

While you are planning finances for your wedding, children education, buying property, meeting short-term goals, what people usually forget about long-term expenses. 

Amid all planning, it is important not to forget that you will get old and the age of retirement is getting near with each passing year. 

Ideally, a person start working at the age 21 and look for retirement by 60. In this 39 years of life span, there are sea of expenses which incurs. To make sure you do not have to compromise on your post-retirement life, it is always advisable to plan early. 

Ajit Narasimhan, Category Head - Savings and Investments, BankBazaar.com, said that the best age to start thinking about retirement is when you start working in your 20s. At that point, retirement is a long way off, and doesn’t seem worth bothering about. However, it is also the time when your responsibilities are fewer and with a little effort, you can save a great deal more than say in your 30s when you have the responsibilities of a family with all the associated expenses of home loans, car loans, children’s schooling expenses, etc. So putting aside a dedicated amount every month to build up a retirement corpus right from your 20s is a good idea."

Moreover, while calculating your returns on your savings, do not forget to include rate of inflation.

Here, we help you calculate how much monthly you should keep aside, if you have "zero savings" right now:

For instance, your current age is 25 years and you are planning to have say Rs 5 crore in your account at the time of retirement. First thing which you need to know is after 35 years (if considering you will retire at the age of 60 years) this Rs 5 crore will have value of Rs 2.75 crore considering the inflation. 

Considering above parameters you should invest just Rs 4,207 per month. The investment can be done in Systematic Investment Plans (SIPs) via Mutual Funds. This means, your total investment amount in 35 years will be Rs 17,66,940.

Now, if your expected rate of return on investment is 12.5%, then at the time of maturity, you will have Rs 2.58 crore.

So, do not delay and start saving now or invest money in financial instruments to get robust returns.

Disclaimer: This story is for informational purposes only and should not be taken as an investment advice. 

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