[PatienceWins]

Another aspect is not to depend on your children entirely for retirement.

I see this with the older generation in my native place. They spent all their savings/ assets other than house on big expenses involving children - marriage, higher education etc - with the expectation that the children will be staying with them or close to them looking after them and taking care of all their expenses during retirement/ old age. Contrary to the expectations, the children has moved to other countries, busy with their own lives and not involved in the day to day life or expenses of the elders. Even if the children provides some monthly payment it does not cover their increasing expenses with inflation and big ticket unplanned expenses - health emergency, house maintenance, big ticket white good replacement like car, consumer durables etc. They have also constructed big houses (white elephant) using their savings with separate bedrooms for children which are lying vacant in upper floors with no one to maintain them. Especially with how life in the future with more micro families, do not count on children for monthly expenses or daily support during retirement.

Also the biggest gift that we can give our children is taking care of our health in young age so that we will be fully independent during our old age. Usually this takes a back seat as we are busy with meeting short term targets and daily chores. With modern conveniences and sedate lifestyles, I see many people, even in late 50s, with poor posture, struggling to get up from chair, climb stairs etc . It would not be a good experience to be sick/ immobile with nobody to take care of. Whenever I feel lazy or struggle with daily tasks to find time for exercise or go to gym, I think about this long term aspect and try to prioritize my daily tasks.

[SnS_12]

Originally Posted by Varun_HexaGuy

I’m 22 and I’m doing fairly well for myself at this point of time. Amongst a lot of things, retirement is something that even I’ve started to plan for.

Beauty of starting to save/investing early in life is that then one has time on their side. The most wise decision that I took in my 20’s which helped me build a sizeable corpus was investing the maximum 12% basic salary amount in Provident Fund, which eventually kept growing over the years and also helped me with achieving financial discipline. Also, in your early days while keeping your expenses in check don’t focus on saving more but rather on earning more. When you start that early in life with good financial discipline achieving a bank balance of 50 lacs will be though but once you achieve that figure the numbers will add up really quickly post that.

Below, is what I had posted on financial discipline that I follow on the thread “What car at what salary”.

Been working for almost 20 years now and haven’t bought my first car yet.

Also, I am one of those guys who would never buy anything on borrowed money personally and especially one that depreciates in value over time. Further, the other personal criteria I have set for myself financially is whether I can buy that particular item twice/thrice at the same price without loosing sleep over my bank balance. Reaching/achieving this financial discipline has been tough, but, now it feels totally worth it for the peace of mind it provides in the long run financially.

Over the years I almost considered buying a Abarth Punto then the VRS and the latest was the M 340i but eventually I just canned the idea as I have decided more than a car I want to get done with the corporate rat race at the earliest and be financially independent. ��

[viggienomad]

In my experience, tier 2 cities are not cheap any more. Tier 3 cities & town panchayats may be.

Having lived in Chennai & Bangalore for considerable years, then shifted back to Madurai (home town) for more than a decade, and again back in Bangalore for the last 5 years. House rent is obviously higher in Bangalore. Apart from the rent, I find the cost of living slightly cheaper in Bangalore than in Madurai.

Also the cost of living varies in different pockets of big cities. Recently visited a retired relative in Malleswaram, Bangalore. It is bang in the middle of the city. Narrow, crowded roads with most people parking their cars on the roads. But have better metro & city bus facilities. Plethora of shops & street vendors. The cost of daily needs are cheaper than in areas around IT parks say Electronic City, Bellandur, Whitefield. It actually feels like a different city.

The retired malleswaram couple live on a pension between 30 - 40k. Own the house they live. Gave away their car to their son (who eventually sold it for an upgrade, lives in another part of city), retain the two-wheeler. They love being in walkable distance to temples. Hires cab if they need a car. Travel out by train for outstation visits (gradually reduced to 1 or 2 in a year). They say they save around 20 - 30% of their person. Their usual savings percentage when the husband earned a salary. So I would like to add this in Retirement planning - your mileage may vary!

[Sargent_dallas]

Originally Posted by Newtown

It is very hard for me to pen this but here goes.

My grandfather was a lawyer who established a well trusted practice. The place was Bombay in the late 1930's early 1940's. They had multiple homes, holiday homes, all sorts of cars available in India at the time and more.

I don't know how many experiences fellow members might have heard, but similar incidents were pretty prominent down south India. My grandfather sold all his lands and gave the proceeds to his elder brother. My grandfather's brother used that money to send his kids to the USA ( They utilized a 1962 USA immigration act that allowed skilled individuals to settle in the USA). Later my grandfather fell ill and his brother never returned any money, unfortunately, he passed away, leaving his 7 kids and my grandmother without any means to survive.

Lesson learned:

Helping others but not at the expense of losing everything.

My father and his siblings went through a lot of hardship at a young age( My father was 6 when my grandfather passed away), eventually, my father studied hard and settled as a govt. teacher and married my mother ( who was a homemaker and later got a job as a govt. teacher) and they were able to build a stable and secure life. My parents led (and still leading) a conservative lifestyle, the lesson I learned from my father is as long as we don't make lifestyle changes with the increase in income, we will have a stable future. My parent's approach helped us to navigate through the health crisis in 2011,2014,2015,2020 but it depleted all the liquid cash.

Lesson learned:

A lakh rupees spent on the Health/ life insurance premium is much more worth than one lakh rupees saved in fixed deposit.

As a kid, I was academically bright and wanted to become an Executive officer( back when I was a kid, I read too many books, and was always fascinated by the reforms done by IAS/IPS/IFS and other public servants. Immediately after I graduated I started preparing for the Indian Engineering Services and spent so much time and money, yet was unable to succeed after 3 attempts, then I joined a govt university for a Management Diploma, and then a university in the USA invited me for their MBA program and I moved to the United States in the year 2019 when I was 25. Later I worked just enough hours to cover my expenses and studied hard to get into Management Consulting. Life was all roses and then Covid happened, things went upside down and all the offer letters were rescinded, after doing a lot of odd jobs for some 3,4 months I got my first job for consolidated pay and no benefits, took that up and worked for a year and later realized that I am getting way less, when compared with other peers and took a leap of faith and moved to Dallas, Texas with a 70$ bank balance a junk car with 190,000 miles and a non-functioning ABS breaks, I stayed with a cousin's family and found a consulting job for 36$/ hour and required at least 65-70 hours a week and get paid for only 40 hours. seeing me so busy with my work and school my then-girlfriend broke up with me a week before our planned engagement, which took a substantial hit on my physical and mental health, later recovered from that trauma and got into one of the Big-4 consulting, found a woman who was beautiful inside and out and I was happily married for the last 9 months.

Lesson Learned:

Early birds always catch the worm. I shouldn't have changed my career path, but when I did I should have been more agile and shouldn't have bowed to the fear.

The life I am living now:

1. I review my options every month for potential cost savings. Last month when I went to visit the VW showroom to test drive a Jetta with my wife, the car saleswoman said she liked my Jeep and she said If I was interested in an exchange, she gave the MSRP for which I brought the car year and half ago and gave a 3K cash discount on new car and I don't need to pay taxes, thus bring down the Monthly Cost to own the car from 1300$ ( $800 car payment +$220 insurance + $200 fuel + $100 garage) to 800$ ( $600 car payment + $75 insurance + $100 fuel). While I certainly miss my Jeep, the monthly saving is quite handy as I am the only one working and my wife is going to university for her masters.

2. 10% of gross paycheck to 401k ( approx $10,000 a year)
3. 300$ combined for HSA and FSA for out-of-pocket expenses for medical emergency
4. A 500$ entertainment budget ( for going out and dinners and shopping)
5. A 500$ emergency fund ( Started last year and it is still building )
6. Inr 30,000 RD in India as an emergency fund.

Sorry for the long post, but I believe past and present decisions dictate future outcomes.

[shankar.balan]

Originally Posted by Sargent_dallas

I don't know how many experiences fellow members might have heard, but similar incidents were pretty prominent down south India. My grandfather sold all his lands and gave the proceeds to his elder brother.
Sorry for the long post, but I believe past and present decisions dictate future outcomes.

You’re a Courageous young Soul. But then, clearly from Your post, that Courage is in your genes. Many of us here, I am sure, have gone through various kinds of tough experiences, but ultimately, what we as individuals make of these and ourselves is what matters.

OT:
A few quotes that I read when I was very young have left a deep impression. These are all from Louis L’ Amour’s ‘Western Novels’, which, apart from being entertaining and action-packed, are also a source of significant wisdom.

"There have always been hard times. There have always been wars and troubles -famine, disease and such-like -and some folks are born with money, some with none. In the end it is up to the man what he becomes, and none of those other things matters. It is character that counts."

"There will come a time when you believe everything is finished. That will be the beginning."

"Do not let yourself be bothered by the inconsequential. One has only so much time in this world, so devote it to the work and the people most important to you, to those you love and things that matter. One can waste half a lifetime with people one doesn't really like, or doing things when one would be better off somewhere else."

“A Ship does not sail with yesterday’s wind.”

"Up to a point a person’s life is shaped by environment, heredity, and changes in the world about them. Then there comes a time when it lies within their grasp to shape the clay of their life into the sort of thing they wish it to be. Only the weak blame parents, their race, their times, lack of good fortune or the quirks of fate. Everyone has the power to say, "This I am today. That I shall be tomorrow."


Good Life Lessons all of the above. I find them worth reading and remembering.

[shivanshbhatt]

This is so true. I have tracked pretty much every rupee spent since 2016 using one of the apps that read your SMSs and auto categorise spends (was called Walnut, now called Axio - a privacy nightmare, but that's another story).

Hey, even I use the Axio app for managing my expenses. Can you throw some light on the privacy part? I really want to know more on this as this is one of my most used apps.

Thanks

[Habanero City]

Originally Posted by am1m

This is something that worries me sometimes. Some sort of once-in-a-lifetime economic crash that wipes out all my savings/investments. The sort of thing that affects even 'too-big-to-fail' financial institutions. We've already seen one major crash (albeit in the US) in our lifetimes. If one is young enough, one can probably wait it out, but shudder to think what will happen if one is in one's 70s or 80s when something like that happens.

I too share your thoughts, especially for the investments in stock markets for long term use after retirement.
The economy bubble that burst in Japan in early 90's brought down Nikkei to such low levels it has not recovered even now.

I shudder to think of this considering the way Sensex and Nifty are rising these days.
Although the capital exposure is limited, the returns now is multifold and may not be available when one needs it later.

Another possibility that plagues me is if there is need to buy a new apartment or house late in life say after 65 due to various reasons.
Considering the present quality of materials and skills of consrtuction, I wonder if the houses would last one's life time.
Selling and buying real estate in old age is definitely not easy especially considering the nuances of this market in our country.

[NewUser123]

Here is an interesting article that lays out the impact of different withdrawal rates and portfolio mixes (stocks/bonds) in retirement.

https://ofdollarsanddata.com/safe-withdrawal-rate/

Enjoy.

[subincb]

Why does anyone want to retire? Then what after retiring. I quit working at 41, The biggest problem is not retiring; after that what do you want to do with the time. How do you want everyday to be. If you are ready to live a disciplined life retirement is good. If you are ready to make good habits that don't frustrate you or irritate you then it's good. If you like to be peaceful it's good to retire early but if you want to do something after retiring better do it at your work. If you have so many unfullfilled desires and want to pursue all that don't retire. This includes wishing to send schools to ivy league schools and all that. They all cost lotta money and newer wishes will keep coming so you fulfil one and the next one keeps coming. There is no end. So for those people keep working.

This is only for people who wants simple life and be happy enjoying nature, spending time with kids, read books taking walk and doing routine stuff daily, you don't need lot of money to retire. Generally people are scared even to lose a mobile phone or some money, yet they make so much money and assets and in the end they die losing all that. And the whole life is a struggle making all that money forgetting to live. If your job is stress free continue there. If there is stress quit and then build habits that won't get bored over years. Start enjoying routine, it may be hard initially to be in a routine but if you are steadfast in some time you wouldn't want to disturb the daily things. Regarding all the fear about medical expenses, the surest things that's gonna happen to all of us is death. What if we get a disease that's expensive to treat... Ans. There are so many treatments even now which most people can't afford. Just forget them. If it's that expensive forget that treatment. Remember the surest thing. There may be fear to leave job. Even I had it but the moment I quit that was over. Any one can try taking a break and if it's not working for them then they can always restart working. When we quit our expenses also get adjusted to what savings we have.

[AirbusCapt]

It generally requires much less to retire than what you assume or plan. If you are a family of two with no dependants, a corpus of 5 crore in liquid assets should cover your current takehome for life. This also assumes that you have finished off payment on your big ticket expenses like a house, and are medically covered with a good insurance.

[vijaykr]

Originally Posted by NewUser123

Here is an interesting article that lays out the impact of different withdrawal rates and portfolio mixes (stocks/bonds) in retirement.

https://ofdollarsanddata.com/safe-withdrawal-rate/

Thanks for sharing and the article makes for an interesting read. Both the US equity & debt/bond markets have depth and a long history which helps in drawing out inferences based on past trends etc. Some recent year articles on the SWR I read indicated that the prior 4% rate might not apply even in the US in future. From what I have seen, the illustrations in many US studies have a retirement start at 60 years and try to determine corpus for 30 years beyond - essentially till 90 years of life.

Also, I wonder how much of this can be correlated to our Indian situation since our equity markets are more recent compared to US and our debt/bond market is still maturing. Given our higher annual inflation numbers as well, I doubt if a 4% or even 5% SWR could be a good yardstick to base our planning on. Nevertheless, there are good points to ponder and consider for our individual situations.

Originally Posted by AirbusCapt

It generally requires much less to retire than what you assume or plan. If you are a family of two with no dependants, a corpus of 5 crore in liquid assets should cover your current takehome for life. This also assumes that you have finished off payment on your big ticket expenses like a house, and are medically covered with a good insurance.

As a broad generalization this retirement corpus could likely suffice but with many caveats like you have mentioned - no major big-ticket loans/expenses, health insurance, world tour etc.

Advancements in technology & medicine will possibly lead to longer lifespans though I don't know how much of it will be qualitatively better. With higher rates of lifestyle ailments and rising medical expenses, we may need to buy more health insurance.

If everything goes according to plan, we will be a family of two with no dependents (they would have settled down in life hopefully!) with no major planned expenses (home loan, kids education/marriage etc.) and sufficient health insurance to tide over ill-health. This is what I wish for myself too There is this plan and have to wait to see how it pans out. Cheers!

[SoumenD]

Originally Posted by Habanero City

Another possibility that plagues me is if there is need to buy a new apartment or house late in life say after 65 due to various reasons.
Considering the present quality of materials and skills of consrtuction, I wonder if the houses would last one's life time.
Selling and buying real estate in old age is definitely not easy especially considering the nuances of this market in our country.

This is something I have been thinking/planning for. Got my first apartment back in 2014(paid off) where I currently reside and very well know it won’t last my lifetime. So will need another one around my 60s. But being on the FIRE journey I definitely don’t intend to make such big ticket investment 10-15 years post retirement(intend to hang boots by 47/48).

Hence I plan to purchase another one around age of 45-50, which hopefully will last for the rest of my life. Ofcourse I will sell off my first flat(will be ~15-20 years old then) and expect it to fund atleast 40-50% of the cost of new one.

[LiveLife]

Originally Posted by Habanero City

I too share your thoughts, especially for the investments in stock markets for long term use after retirement.

Hi..

Interesting point you made there, adding a few points to yours.

With age the principle of investing changes. Assume a pyramid comprising of three asset layers: 1) financial instruments like equity, etc; 2) physical assets/real estate and, 3) cash or similar reserves; FD included. This pyramid reverses as one goes from 20+ to 50+. However, the layers of pyramid change significantly post 60 when a lot of addition is made to cash or similar reserves at the cost of #1 n #2. Thus post 60, one is protected to an extent to equity and real estate market shivers

Thanks

[diwakarjha]

Hi All,

A lot of vey useful information and wisdom in this thread than perhaps in any one book you can read on the topic. Thanks to all who have written in this thread.

Given how honestly many of us have shared their experiences, including mistakes here, I thought I would also share mine with a hope to elicit some useful info/advice on it which can help me.

At 21, I got a campus placement in Infosys, but having come from a small place in Bihar, I also had an ambition to become an IAS/IPS officer, no less. Hence, I did not realize the importance of the lucky break my life gave me and left Infosys after 2 years to prepare for Civil Services. Though I cleared Prelims in all my 4 attempts and got good marks in Interview in the only time I cleared Mains, I could not find a place in the final merit list.
Having spent 4.5 years in preparation without a job and nothing to show, I was lucky to become Assistant PF Commissioner in EPFO and stayed there for next 4 years only in the interest of my professional stability.
But, I realized that I had not left Infosys for this work and therefore decided to go back to private sector. I did my MBA from XLRI, Jamshedpur in 2007-09 and re-entered private sector in 2009 at the age of 35.

That was perhaps one of the difficult years to graduate from any college and it did not help to be 35 in a batch which had most people below 26 and hardly a few in 28-30 age group.

In 2009, I did not have any savings with a wife and a 3 year old daughter to support, but I did have a education loan of my MBA.

Since 2009 till a few months ago, I invested in mutual funds with discipline and never took out any money from mutual funds or PF. I also tried not to upgrade my lifestyle with my salary increases.

I think I am capable of contributing and earning more, but somehow the gaps in my career and MBA in 2009 did not help matters much. I worked my way up in all organizations I worked by staying not less than 4 years, which my batchmates (earning in multiples of my salary)say was a wrong decision. Perhaps my decision to stay longer everywhere stemmed from the early career gaps and the interview questions I had to face in my job changes.

I am 49 today and whatever I have in terms of financial assets is mutual funds +PF + NPS = 65 lakhs and about 40 lakhs in land assets, all generated only in last 14 years. MF +PF was higher, but I had to withdraw some money from it and invest it in a 3 BHK flat I bought in Bangalore recently. I am not sure if it was wise on my part to do so, but I thought I was getting late for a home loan which I would certainly need for a house purchase and also because I wanted to buy it for my wife whose long term desire it was and who suffered many hardships in my jalebi like career, despite having got married to a Govt servant with an assured pension if I had stayed there.

Today I am in a much better financial health than I ever was and I thank a relatively disciplined life which I was forced to live post 2009. I can count only two instances where I spent more than I could afford then - 1. I bought a car for my father as a gift, since he was getting old and had always desired to own a car. 2. In 2016, inspired by so many enthusiastic reviews of S-Cross 1.6 by fellow team-bhpians, I bought it for us. (And what an experience it has been !)

I don't think early retirement is an option for me. My financial worries stem from following points:

1. House loan EMI of about 80,000 per month for next 20 years, which I would need to find means to repay earlier by 60-62.
2. education expenses of my two children. My daughter will appear in NEET next year and son is 3.5 years away from doing 12th.
3. Retirement corpus - somebody mentioned here 5 crores, which also looks difficult for me given the outgo from my corpus which can be expected in next 5 years on my children's education etc.
4. Some financial assets for my children - I don't find it necessary to de-risk their lives completely nor is this feasible I suppose, but if I can leave something for them which can act as a cushion for them, I would be happy because I agree with observations of so many here that perhaps their lives are going to be much more uncertain than ours.
5. Any big, out of the blue illness affecting me and putting all the above in jeopardy. I have a term insurance of about 3 crores, but that will not cover the situation where I fall ill, suffer a loss of income and also add to the expenses of the family. I have not provided anything for that.

I put this all out in the hope of eliciting some comments and of course some advise too on what I can do better in future. Life is not long enough for any of us to keep doing our own mistakes and learning from them and I already seem to have exceeded my quota in early youth, hence any advice would be useful for me.

[SnS_12]

Originally Posted by diwakarjha

1. House loan EMI of about 80,000 per month for next 20 years, which I would need to find means to repay earlier by 60-62.

Sir, you mentioned you're currently 49 and have a home loan you need to pay for next 20 years and at an EMI of 80k p.m the amount would be 19,200,000.

If I were you my main priority would be to clear this as soon as possible for one not to carry such debt at an older age and the main being calculating how much is the interest component that I can save by increasing my EMI and reducing my loan tenure or by paying early.

Either you can tap some more amount from your current savings or increase your EMI amount, because it would make better financials sense to save a few lacs on interest amount on loan payment now than investing that amount to save/earn interest for the future.

A penny saved is a penny earned!