[sunilch]

Originally Posted by huntrz

I never thought from this angle. Inflation and interest rates are lower in developed economies. I have a feeling we, the current working generation, will run into similar problem in future.

Originally Posted by sunilch

What you are saying is very true and applicable to all countries that are either developed or nearly developed. In such cases, Rental yield is quite good (look at some examples across the globe, baring the Pandemic period).

Relevant to what we were talking about:

https://www.bloomberg.com/news/artic...g?srnd=premium

Although this topic is more of an Economics one as opposed to retirement planning one

[livyodream]

Originally Posted by rajushank84

Not sure how I missed this thread, but this is solid advice, I am thinking about doing this sooner instead of waiting for retirement. Tech enables a lot of things that haven't been possible before, particularly in terms of remote work/enterprise.

I don't agree that this means terrible schooling, backward thinking and lack of healthcare facilities. It depends on the location. I hear "city" folks (who live in the center of the city) voice similar concerns about living 20km away in suburbs, simply because they aren't used to it. Sometimes, the hospitals and schools in suburbs are actually better than the ones next to the breadboxes we refer to as living quarters in cities. There is this notion that "city life" is "normal" and that country living is something "different". When we think about it, it is the other way around. We are still an agricultural society, that is our root, not the concrete jungle.

I am looking at places close to the western ghats. Some of those cities have not only top-notch facilities but also not different from metros in terms of liberal thinking.

I just did the same. I am 36. Own a home in Bangalore, just bought a small home in Manipal (not even my hometown).

Me and Wife are typical IT people who can work from anywhere given the pandemic situation. Hence shifted to new house temporarily and will shuffle between whenever needed.
Manipal has everything that a typical small family needs. Hospitals when one gets old , universities when kids grow up. Good quality of life, pollution free town, metro like facilities etc etc are complimentary .
Bangalore home would be a rental earner for me if I shift here whenever a need arises.

For the Retirement planning as this thread is about: I am not talking about making money here. Its about retiring somewhere peacefully too.

[Red Liner]

Originally Posted by livyodream

I am not talking about making money here. Its about retiring somewhere peacefully too.

The problem is we lose sight of the forest for the trees...and soon we die having made enough money but not having lived a life at all.

[SoumenD]

Stumbled upon this thread over the weekend. Phew!!! Looking at those retirement corpus numbers(7-12cr), think I will have to work till 75, let alone early retirement

But never the less, great points from experienced folks. Please keep pouring in your thoughts. Much appreciated

[whitewing]

Originally Posted by SoumenD

Stumbled upon this thread over the weekend. Phew!!! Looking at those retirement corpus numbers(7-12cr), think I will have to work till 75, let alone early retirement

The important number is not how many zeros the corpus has, rather how long will the corpus one has created will last - given one's expenses.
But then the ability to estimate of one's future expense which looks more like the dark art of predicting the COVID numbers :-)

I have my expense data for the past several years - now I know reasonably well, how much it took to maintain my lifestyle. And based on that I know reasonably well how much it will take - if the economic conditions remain generally stable.
That said, in reality, one never knows what tomorrow brings - major events like civil unrest / depressions can wipe away large chunks of the corpus, or there could be a boom that will make the corpus grow many times over.
We can build multiple models, most of those will leave us with that nagging feeling that some events would end up exhausting the corpus, ahead of kicking the bucket.

It is like taking a cold water bath on a cold winter day - it may refresh us or land us with pneumonia. There's only one way to find out...
Its been 2 years and I'm still mulling over taking the plunge. But in the process am getting a better understanding how much is "enough" for me.

Originally Posted by SoumenD

But never the less, great points from experienced folks. Please keep pouring in your thoughts. Much appreciated

Aye, to that, so many perspectives. Some that call for a re-evaluation of our priorities and choices.
Especially the following gems

Originally Posted by Red Liner

The problem is we lose sight of the forest for the trees...and soon we die having made enough money but not having lived a life at all.

Originally Posted by SmartCat

People are doing this:

To get here:

[deep_bang]

Rather than debate on how much corpus we would need, can we build a formula that is based on the past spend (say we know the spend of the last year) and the find a way to arrive at the "corpus"?

The simplest idea is to look at the last year's expenditure and use the inflation number (say 7%) to find the expenditure when you want to retire. However the expenditure itself may be different. I might spend a lot more on healthcare for example. So we need to account for some new types of expenditure and some which we may no longer have (ex: kids education).

[m8002?]

There is a very active reddit subform FireIndia. A rule of thumb is your corpus needs to be 300 times your current monthly spend. That should cover for a steady inflation.

One can never plan for outliers like a long war, severe pandemic, riots or coups. Those affect those not doing FIRE equally.

[Oxy]

Originally Posted by m8002?

There is a very active reddit subform FireIndia. A rule of thumb is your corpus needs to be 300 times your current monthly spend. That should cover for a steady inflation.

One can never plan for outliers like a long war, severe pandemic, riots or coups. Those affect those not doing FIRE equally.

So if I am spending 20k a month, 300 times of that is 60 lakhs. Don't think that would be sufficient.

[m8002?]

Originally Posted by Oxy

So if I am spending 20k a month, 300 times of that is 60 lakhs. Don't think that would be sufficient.

To each his own. If it's not sufficient for you, it's fine. Its ust a rule of thumb for your day to day expenses. Typically, for FIRE corpus , you don't consider things like children's education, marriage or new house.

If your current expenses are 20k, you get 30k per month starting today with a 6% ROI on 60 lacs. So the extra 10k should be your savings which will keep getting adding to the corpus.

[daretodream]

Originally Posted by m8002?

There is a very active reddit subform FireIndia. A rule of thumb is your corpus needs to be 300 times your current monthly spend. That should cover for a steady inflation.

One can never plan for outliers like a long war, severe pandemic, riots or coups. Those affect those not doing FIRE equally.

OT Went through that forum and subscribed. Browsed through the subs.
I must admit I got complex (and am depressed by comparison to self ) looking at how well folks have done well in their lives to build such huge corpus to build financial independence and thinking of retiring early.

[sunilch]

Originally Posted by Oxy

So if I am spending 20k a month, 300 times of that is 60 lakhs. Don't think that would be sufficient.

Originally Posted by m8002?

To each his own. If it's not sufficient for you, it's fine. Its ust a rule of thumb for your day to day expenses. Typically, for FIRE corpus , you don't consider things like children's education, marriage or new house.

300X seems reasonable provided following assumptions are met:

1) You have net zero inflation for the rest of your life
2) Nothing major will come in the form of expenses during your life (No major health issue, no major increase in monthly expenses due to lifestyle upgrades, expenses for education or marriage for children or anything else)
3) No natural calamity such as this ongoing Pandemic.
4) This is at todays' rate. Not for the future. So if you want to retire today, you can if you have 300x of your monthly expenses.

If you assume same expenses (and not reduced when compared to when you are working) and same lifestyle, 300x will take care of you for 25 years (300 months) before you go penniless. So if you retire by 55, you will have enough money to live until 80 and a house to leave behind.

But I believe 300x is an average figure and above two assumptions will not hold over such a long period. So you are likely to need more (may be 400x) if your expenses grow during retirement or less (may be 200x) if you meet your maker sooner.

[m8002?]

Originally Posted by daretodream

OT Went through that forum and subscribed. Browsed through the subs.
I must admit I got complex (and am depressed by comparison to self ) looking at how well folks have done well in their lives to build such huge corpus to build financial independence and thinking of retiring early.

Same here . After spending a couple of weeks there, decided to keep away. But its got a wealth of information there if one is serious. There are guys in their 20s discussing FIRE there.

[Red Liner]

Originally Posted by m8002?

Same here . After spending a couple of weeks there, decided to keep away. But its got a wealth of information there if one is serious. There are guys in their 20s discussing FIRE there.

Not to worry...they will meet someone and get married soon and then

[desidino]

I think how one views retirement is important. For me, retirement is not about just lazing around and doing nothing. Its mainly about financial freedom and doing something that you truly love. Something that you would do even if you don't earn anything out of it. Of course, you need basic financial planning to meet your expenses.

Yes, retiring in hills is challenging for those who are not from hills. But, for the lucky ones like me with roots/ community in and near hills, it is the most obvious place to retire to. No doubt it is a tough life for the real hill villagers who need to sustain on farming, dairy, selling handicrafts and other means to meet their expenses. But, for those who have done adequate financial planning, it isn't as far fetched as it seems.

Take the case of Uttarakhand for example, where I am from. Dehradun is too crowded, so I don't plan to retire there. But, it has enough city facilities if needed. Both essentials - hospitals, schools, government offices - as well as non essentials (such as malls). While Mussoorie is too crowded, there are enough hill towns within 1-2 hours radius of Dehradun (or Rishikesh) that one can think of retiring to while still being able to visit Dehradun if needed.

My plan is to rent a 2 BHK in the outskirts of such hill towns. My estimated monthly expenses (including rent) should not me more than INR 50k. Beyond that I am planning about a week of travel per month within Uttarakhand and nearby. Assuming, INR 5-7k expense per day for travel (accommodation, food, fuel), that is another INR 50k per month. Remaining 3 weeks in a month would be spent on lazy days, local travels, day hikes, visiting relatives, hobbies, etc that would involve minimal expenses. All in all, INR 1 lac per month of expenses is what I have budgeted for.

I plan to try the above for 2-3 years to see how it goes while tracking expenses against my investments to test how sustainable it is. Best case, it does indeed prove to be sustainable, and I am set for the rest of my life. Worst case, I return to the corporate grind after a beautiful 3 year vacation. Not so bad case, I find something meaningful that also generates income (even if its little) which allows me to increase the test period to beyond 3 years until it proves sustainable.

Retirement planning is critical. But, as Sadhguru says, one should chase life, not lifestyle. There is no limit to how much one can spend. One needs to figure out, how much one really needs to fulfill the basic needs and be able to do what one really loves.

Nothing brings me more joy than being in the mountains. I have had the good fortune of having vacationed (including some memorable day hikes) in mountains from Canada to New Zealand. While 5 star hotels and alpine chalets are something to be experienced, at the core of it, what stays with me from those vacations are the mountains.

Give me my mountains and I will be happy within them.

[download2live]

Originally Posted by Red Liner

Not to worry...they will meet someone and get married soon and then

Believe it or not but a bad marriage can actually nullify all the right things one has done financially. Only event which has a bigger impact on how one fares in life is the set of parents god has chosen for you.
Link

If someone wins a lottery at these two points then it is mostly going to be ok unless they are hell bent on ruining it for themselves.