[Red Liner]

Move to the mountains with your family, grow your own veggies, walk everywhere, breathe fresh air, drink the best water and eat good nutritious food.

This is a good retirement plan as opposed to sitting in some godforsaken city and trying to amass paper money for the rest of your short meaningless life.

[adithya.kp]

That is a great advice. I kind of agree with you. (Not mountains) But a tier 3 city or a small town) . Life is actually very short. Having said that, its very difficult to implement. Two reasons I can think of. 1. Once you get used to a city, it maybe very difficult to adjust to a new place. 2. One tends to compare to others (Status, net worth etc.) . I know that one shouldn't compare. But I guess its easier said than done.

I have heard a lot of friends/relatives say, they would quit the rat race, move to a village, do things like organic farming etc. But I haven't come across anyone do it. What could be the reason for this?

Originally Posted by Red Liner

Move to the mountains with your family, grow your own veggies, walk everywhere, breathe fresh air, drink the best water and eat good nutritious food.

This is a good retirement plan as opposed to sitting in some godforsaken city and trying to amass paper money for the rest of your short meaningless life.

[Saanil]

Originally Posted by Durango Dude

I'd say the best retirement plan is your and your family's health.

I agree with what you have said. Health should be the top priority. But this thread is about the financial aspect of retirement hence I was showing approximate calculations in order to get some perspective.

Originally Posted by Red Liner

This is a good retirement plan as opposed to sitting in some godforsaken city and trying to amass paper money for the rest of your short meaningless life.

Originally Posted by adithya.kp

That is a great advice.

Again, this might sound good but it is difficult to implement. Most of the jobs are concentrated in big metro cities (Mumbai, Bangalore, Delhi, Chennai etc) and you will have to live in a city in order to accumulate some kind of wealth. Plus social circle is also important. It is difficult to leave your friends/family/relatives and move to some other location just to enjoy a peaceful life post retirement.

The reason you do not find many people doing this is because it is very difficult and probably not practical for many people. Personally, I think making such drastic changes in your lifestyle might not work.

Anyways, the point behind my post was to look at the mathematical part of retirement. I would encourage everyone to evaluate their spending needs and have a broad picture of how much saving/investing is required in order to reach their goals.

[V.Narayan]

Dear @ Saanil, First it is a compliment to you that you are planning for the long term at a relatively young age. Most don't wake up to the fact till they are around 40. The challenge with all these wealth management specialists or retirement specialists is that most have not made wealth of even Rs 10 or 15 crores for themselves {here for the Indian context I'd define wealth as liquid assets at cost or market which ever is lower} nor have they actually retired and walked that journey!

As one of the few, on Team BHP, who is actually retired and pursuing a volunteer second career allow me to share my perspective. Your situation isn't as bad as the calculation spread sheet shows.

First, for most of us, maybe 2/3rds of us, our incomes grow in real terms as we grow older and hopefully more senior in our careers. The ratios can vary by person but in my case 75% of my asset creation happened in the last 10 years before retirement and 90% happened in the last 17 years. Factor this concept in.

That figure of Rs 36 crores or whatever else, is that INR in 2048 purchasing power terms or 2021 buying power terms.? You may want to check that out. That number of Rs 36 crores sounds like a 2048 rupees number. If you count inflation at say 5% it comes to ballpark Rs 9 to 10 crores in 2021 rupees.

My annual cost of living is a bit over the Rs 1.2 crore figure you have used and trust me I live very well including supporting two rather old parents who between them need 1 full time 24 x 7 x 365 nurse attendant plus supporting the last 2 kids overseas whose final orbital rockets haven't fired yet.

As for the assumptions below - (i) take retirement as 65 not 60; use 63 to keep a safety buffer if you wish (ii) inflation of 5% keeping the stage of economic maturity is more likely than 7%. In compounding terms that is a light year difference (iii) Corpus of 30X sounds way too high. My live experience indicates 18X as the locked-in corpus you need to feed off the interest/dividends - make that 20X to be safe. You could of course have another corpus for safety, investments, big ticket nice to have items, donations etc (iv) Your current corpus at the young age of 32 doesn't need to do all the heavy lifting. You'll earn in hopefully increasing amounts over the next 28 or 33 years - amounts that will increase not only in real terms but even faster in nominal terms.

You are on a good track. If your career of 43 to 44 odd years is a football game you are at about minute 20 of the 90 minutes. The best lies ahead.

Originally Posted by Saanil

Current age (as of 2020): 32 years

Retirement age: 60 years (i.e. year 2048)

Current annual expense: 18 lakhs (i.e. 1.5 lakh per month)

Current retirement corpus: 1 crore

Inflation rate: 7%

Annual expense at age of 60 years: 1.2 crore

Retirement corpus needed at the age of 60: 36 crores (30 times of annual expense)

Rate of return required: 14%

As shown above, I assume that annual expense for a household (5 members) in Mumbai is 18 lakhs per year. Assuming inflation rate of 7%, my current expenses (i.e. 18 lakhs per year) would rise to 1.2crore per year by the time I am 60 years old. As per a thumb rule, your retirement corpus should be 30 times your yearly expenses i.e. 30 times of the annual expense when I am 60 years old. This comes out to be 36 crores (30 multiplied by 1.2crore). If the value of my corpus currently is 1 crore, I would need to compound the corpus at a rate of 14% in order to reach my target.

The estimated figure of 36 crores seems huge even though I know that this amount is required at the age of 60 years (and not today!). Also, I am aware of the fact that my estimate of my current expenses (18 lakh per year) might also be on the lower side in a city like Mumbai.

[SmartCat]

People are doing this:

amass paper money for the rest of your short meaningless life.

To get here:

Originally Posted by Red Liner

Move to the mountains with your family, grow your own veggies, walk everywhere, breathe fresh air, drink the best water and eat good nutritious food.

[Red Liner]

Originally Posted by adithya.kp

I have heard a lot of friends/relatives say, they would quit the rat race, move to a village, do things like organic farming etc. But I haven't come across anyone do it. What could be the reason for this?

Fear. Look at this thread and scores of others from across the country. As a race, we are afraid to get out there and do our own thing. We like to be a herd.

Originally Posted by SmartCat

People are doing this:



To get here:

The problem is how much paper money is enough? When do you take the call? How do you nullify further commitments? And what happens to the crux, the actual liveable part of your life when you can actually get around as opposed to be sitting in a wheel chair or using a walker?

Dramatic much

The above are generic comments, please dont treat them as insinuations against yourself (the reader, not smartcat). Its food for thought.

Let me give an actual real example. During this quarantine, a mechanic i frequent got fedup, quit his home in Bangalore and moved with his wife, kiddo, his mom and dad to a 3.5 acre farm 60 kms away from Bangalore. He still runs his workshop in Bangalore. They pay 7,500 per month for rent.

The mom and dad are fit and have great medicals because of all the farming they do with veggies and what not. He has started and experimenting with a goat and poultry farm and some hydrophonics thrown in. The wife helps manage everything in his absence. The kid has lots of free space (helps that the kid is just a year old but hey they arent missing a day care). Fresh air, good food, good exercise, good ground water. He bought himself a used aether and spends 50 bucks a day in recharge bills to fuel his ebike to work and back.

He did it. Inspite of all the problems he has. He got on with it and did it. He is the man. You can be one too

[SmartCat]

Originally Posted by Red Liner

The mom and dad are fit and have great medicals because of all the farming they do with veggies and what not. He has started and experimenting with a goat and poultry farm and some hydrophonics thrown in. The wife helps manage everything in his absence. The kid has lots of free space (helps that the kid is just a year old but hey they arent missing a day care). Fresh air, good food, good exercise, good ground water. He bought himself a used aether and spends 50 bucks a day in recharge bills to fuel his ebike to work and back.

Somebody who wants to adopt this lifestyle - staying away from civilization - is also forced to stay away from their own kids. That's because "good" schools are unlikely to be closeby. One will be forced to drop the kids in a boarding school, and meet them once a month.

When kids go grow up, they will be in a college in some other bigger city - and staying in PG. So something like this is not acceptable to everybody (parents I mean), even if they dream of such a lifestyle. Retirement choices like this is not always about the money

[phamilyman]

Originally Posted by Red Liner

Move to the mountains with your family, grow your own veggies, walk everywhere, breathe fresh air, drink the best water and eat good nutritious food.

This is a good retirement plan as opposed to sitting in some godforsaken city and trying to amass paper money for the rest of your short meaningless life.

https://www.instagram.com/zentropi.farm/ is such an attempt by a friend Harshad Sharma (hiway).

none of it seems really easy to be honest. If anything - I would say, do it in your 40s while you have the energy to do so.

Another option is what a friend, Arun did - he's an ex commercial consulting / corporate analyst, having last worked at a subsidiary of SHELL - as of 2019, he simply does photography and lives simply

https://www.instagram.com/arunramki1/ is his bird / animal photography instagram

[sunilch]

Originally Posted by Red Liner

Fear. Look at this thread and scores of others from across the country. As a race, we are afraid to get out there and do our own thing. We like to be a herd.

You are wrong to think that Fear is the primary reason millions of people live and work in cities for the prime of their life and do not move to a remote peaceful place.

This 'Fear' or the whatever we may call it is applicable to us humans in every setting. Be it a Metro, Tier 2 city or a remove village in Nepal/HP/UK/etc.

There are millions of people who live in small cities and villages and enjoy their life there. They do have complaints or 'Wants' that they don't get there but they know the advantages of their place/lifestyle and do enjoy what they have. So as a proportion - only a smaller pie of the total population lives in big cities with a terrible lifestyle and they detest what they have or are doing.

You may find many on online forums/social media but when you talk to people in general and travel across India over many years of your life - you will realize most are happy and only go over changing priority phases in life.

Originally Posted by Red Liner

The problem is how much paper money is enough? When do you take the call? How do you nullify further commitments? And what happens to the crux, the actual liveable part of your life when you can actually get around as opposed to be sitting in a wheel chair or using a walker?

This is something that each person realizes at some point in time of their life. For example, 10 years back I believed having 2Cr was good enough to retire. Not today - today I believe I may need 6Cr but only and only because I have more liabilities and obligations to fulfill. Not all of them can be fulfilled in a remote town/small city and I also enjoy my life in a Metro (I was born and raised in a Metro). But over time I do realize that both health and wealth are important equally and after I am done with my liabilities and obligations (well some of them, not all) - I may not need this much money.

This issue of trying to speculate your future needs with too many unknowns is something that we have taken upon ourselves without invitation and it applies to everyone - even folks living in Tier2/3 cities do that.

There is a rat race in smaller cities to build a big house for example. A family of 4-6 people tries to build a 10K sq.ft. house in smaller cities such as Pune, Indore, Bhopal, Jaipur, Jammu, Lucknow, Kanpur, etc for example. Do they need it? No. I know families who did this and at a later point in time when they become Sr citizens, they find it impossible to maintain such a large property.

Also, with the advent of Social Media in the last 10+ years - Our 'Wants' have exploded. Now people want to visit and taste the snow in Antarctica itself, climb the top of the Pyramids in Egypt in next December and also log some lap-time on the Nürburgring next year. All this needs money on a different scale. But over a period when we grow, we do realize that we can live with some of these experiences and not all are important to have a happy life.

Originally Posted by Red Liner

Let me give an actual real example. During this quarantine, a mechanic i frequent got fedup, ...........He did it. Inspite of all the problems he has. He got on with it and did it. He is the man. You can be one too

Everyone thinks on these lines and wants to do it. But not everyone is in same position to do so. He did it because he had the willingness, the support of his family, is ok with some compromise on family front and also has no/few obligations for example. People do this based on their capacity and the support they have.

Anyways, we seem to be going OT here

[adithya.kp]

I think the general opinion is that, its not very practical. Although there may be some rare cases.
There is a slightly different plan which may be somewhat viable. You still work, but dont work hard. Just treat it as a 9 to 5 job and do only what is required. For people in IT or a similar field, this might be a little difficult to implement. Because you always want to give your best. Also you might be labelled, not passionate. Has anyone done it?

[sunilch]

Originally Posted by adithya.kp

I think the general opinion is that, its not very practical. Although there may be some rare cases.
There is a slightly different plan which may be somewhat viable. You still work, but dont work hard. Just treat it as a 9 to 5 job and do only what is required. For people in IT or a similar field, this might be a little difficult to implement. Because you always want to give your best. Also you might be labelled, not passionate. Has anyone done it?

In fact for people in IT - this is quite easy. I have seen many and I am sure there are many from the service industry who have done it.

The idea is that you downgrade your employer or your role to something that you are very good at and it may not need you to be running ahead of the race all the time.

For example, in IT - once you reach 50 - you can join a company which has an IT department but its core business is not IT. You can join as a head of some vertical and have a peaceful 9-5 job.

In fact, it is also done by many of the C-Suite type consultants who initially work for big brands such as McKinsey, Bain, BCG, etc. They hop out of their big-shot employers after say 5-10 years and join some large corporate groups with better work-life balance. Here they go from having a terrible work-life balance at McKinsey to a good one at say HDFC, Citi, M&M, TATA, etc.

Again this is purely dependent on an individual - his choices, his capacity, his definition of a good work-life balance.

[Lobogris]

Originally Posted by Red Liner

Move to the mountains with your family, grow your own veggies, walk everywhere, breathe fresh air, drink the best water and eat good nutritious food.

This is a good retirement plan as opposed to sitting in some godforsaken city and trying to amass paper money for the rest of your short meaningless life.

This moving to the hills, small towns and villages, is often touted as the best possible option for retirement by many people. In fact, apart from possible low expenses, it is the absolutely worst idea of all. In a developing country like India, the mindset of people outside of big cities is stuck a few centuries behind. Do you want to live in place where people would frown on a woman wearing shorts or drinking? Would you want everyone to poke their noses into what you do, who visits you and so on? Do you want people to make fun of you for playing tennis or cricket as they think old people should not do such things? If you are single, forget dating or bringing a partner over. Never even dream of holding hands or any public display of affection. Forget about tennis courts or swimming pools or gyms. What would you do all day? There will be no malls, cultural events like a concert or exhibition, no place to buy any international food like wine or tortillas etc. If you need to see a doctor, forget about any top specialist or big hospitals. Even internet service might not be robust if at all available. All in all, one would give up on all modern conveniences unless one lives in a smaller town close to a major city.

[Cessna182]

Looking at the numbers here, I am not sure how a normal Indian can even afford retirement. If you earn about a lakh a month after tax (ctc is around 18 to 25 per annum depending on the company pay structure) then your expenses in even a cheaper part of the city will be about 50 to 60k if you do not splurge. Savings of about 5 lakhs a year. Even in 20 years with a disciplined lifestyle one cannot make a reasonable corpus. This CTC is very decent in India- most earn far less. Yet, even a person with this salary cannot retire.

One might say that the salary will rise etc. But how many people do you know of who earn more than 30 to 40 lakhs a year outside the tech bubble? A GM at a blue chip like Bajaj or Mahindra will get around 30 to 40 lakhs a year and one reaches that position in the 50s. A few top executives may earn more, but even the business heads in the bluechip firms have a salary of less than 60 to 70 lakhs and again, you usually reach that position quite late in your career. One can verify this by looking at the annual reports of these companies.

Unless you have access to ancestral properties or wealth, or a very successful business, it is simply impossible to retire in India. Wages have stagnated in the last few years but prices of things like medical care have gone up drastically.

[CosmicWizard]

Originally Posted by Lobogris

This moving to the hills, small towns and villages, is often touted as the best possible option for retirement by many people. In fact, apart from possible low expenses, it is the absolutely worst idea of all. In a developing country like India, the mindset of people outside of big cities is stuck a few centuries behind. Do you want to live in place where people would frown on a woman wearing shorts or drinking? Would you want everyone to poke their noses into what you do, who visits you and so on? Do you want people to make fun of you for playing tennis or cricket as they think old people should not do such things? If you are single, forget dating or bringing a partner over. Never even dream of holding hands or any public display of affection. Forget about tennis courts or swimming pools or gyms. What would you do all day? There will be no malls, cultural events like a concert or exhibition, no place to buy any international food like wine or tortillas etc. If you need to see a doctor, forget about any top specialist or big hospitals. Even internet service might not be robust if at all available. All in all, one would give up on all modern conveniences unless one lives in a smaller town close to a major city.

I spent first 18 years of my life in Kumaon hills and can vouch 100% of everything you have written here. These places are great to spend short time as a tourist but life is hard for the locals. None of my cousins live there anymore and most of uncle aunts, who moved in with their kids in the cities, don't fancy returning back ever. Go figure!

[sunilch]

Originally Posted by Lobogris

This moving to the hills, small towns and villages, is often touted as the best possible option for retirement by many people. In fact, apart from possible low expenses, it is the absolutely worst idea of all. In a developing country like India, the mindset of people outside of big cities is stuck a few centuries behind. Do you want to live in place where people would frown on a woman wearing shorts or drinking? Would you want everyone to poke their noses into what you do, who visits you and so on? Do you want people to make fun of you for playing tennis or cricket as they think old people should not do such things? If you are single, forget dating or bringing a partner over. Never even dream of holding hands or any public display of affection. Forget about tennis courts or swimming pools or gyms. What would you do all day? There will be no malls, cultural events like a concert or exhibition, no place to buy any international food like wine or tortillas etc. If you need to see a doctor, forget about any top specialist or big hospitals. Even internet service might not be robust if at all available. All in all, one would give up on all modern conveniences unless one lives in a smaller town close to a major city.

Plus for the locals, you will always be the outsider who came from the big city

This is something that may bother you or it may not but it will be evident in their behavior and will go away only when you start ignoring it and also over a long time period - say 10-15 years.

Depending upon the place, it may or may not impact you much as it is a very recent political development