Retirement Planning: Age 32 years, monthly expenses Rs 35,000, retirement age 55 years; life expectancy 75 years, what will be retirement corpus and investments to achieve that

Retirement Planning: Retirement planning is important for everyone, and they need to know about the investment sources and the return to achieve that goal. But equally important is to know about the retirement corpus they need and the investments they need to make to achieve that target.

Some of the ways to calculate the retirement corpus are to know your retirement age (the age when you want to achieve financial freedom), monthly expenses at the time of retirement, your other financial goals, goals, liabilities such as loans, and the value of your current corpus or investments.

Inflation is another important factor to keep in mind.

Then, you need to assess how much monthly investment you need to achieve that goal.

For that, you need to look for the right investment schemes that can give you post-tax returns to help you achieve your retirement corpus target.

The annualised return from investment should be modest since retirement is long-term planning, and market-linked investments can go through ups and downs.

Here, we go through a retirement plan, where the age of the person is 32 years, monthly expenses are Rs 35,000, retirement age is 55 years, life expectancy is 75 years, and the current accumulated corpus is Rs 5 lakh.

We are expecting 12 per cent annualised return pre-retirement and 6 per cent annualised return post-retirement. The inflation rate will be 6 per cent.   

Here are the projected results

Expenses at 55 years of age= Rs 1,33,691 (at 6% annual rise)

Future value of current Rs 5 lakh corpus= Rs 67,76,174 (At 12% return)

Future corpus amount needed to meet expenses= Rs 3,20,85,840-Rs 67,76,174 (future value of current investments) = Rs 2,53,09,666

Number of years the person needs to invest= 23 years

Lumpsum amount one needs to invest= Rs 18,67,549 

SIP amount you need to invest= Rs 17,182

(Disclaimer: This is not investment advice. Do your due diligence or consult an expert for retirement planning.)