Make Your Sunset Years Cash Positive

There are several layers to retirement planning—estimating future expenses, duration of retirement, level of current savings that need to grow so that they suffice for our sunset years. To understand the nuances of such decisions, let us discuss an illustration that shows how to plan for retirement, and the cash flows post retirement. Let’s say, 48-year-old Amit Patel expects to retire at 60, and has 12 more working years. He estimates his monthly expenses to be Rs 40,000 at present. His life expectancy is 80 years, which means he has to plan for 20 years when he will not have any active income. Know Your Numbers Inflation Adjustment: To start with, we need to see how much Patel would need as monthly expenses after 12 years, when he retires. The estimate of Rs 40,000 per month is as per the current needs and price levels. So how much would the monthly expenses expand to...