Retirement planning involves determining the amount of money needed for a comfortable life after work, aiming for financial independence by preparing for a post-retirement duration of 25 to 35 years. Key considerations include inflation, medical expenses, and the need for a diversified investment portfolio, estimating that an average retirement corpus could range from 5-10 crores depending on various factors. Strategies for efficient management include regular investments, avoiding high debt, and ensuring adequate health insurance.

1. DEVTECH FINANCE
WEALTH MANAGEMENT – PART 5
RETIREMENT
PLANNING

2. INTRODUCTON TO RETIREMENT PLANNING
• Retirement Planning is the process of determining and
accumulating the retirement corpus one would require to live a
comfortable life after the paid work life ends.
• The ultimate goal of retirement planning is to achieve financial
independence.

3. OBJECTIVES OF RETIREMENT PLANNING
• Increasing life span coupled with early retirement makes it crucial for us to
plan for a post-retirement life of atleast 25 to 35 years.
• Inflation will erode the purchasing power of money so, cost of living is bound to
increase.
• The risk- taking ability will also go down resulting in a shift towards safer
avenues of investments.
• To enjoy same quality of life after retirement and to cover daily living
expenses.

4. Track & review plan
Investment portfolio construction
Assess your current financial situation
Consider inflation rate to assess future value of retirement goals
Calculate the retirement corpus required
Set your retirement goals
Decide your retirement age
RETIREMENT PLANNING PROCESS

5. OBJECTIVES OF RETIREMENT PLANNING
• To cover medical expenses and be prepared for medical emergencies.
• To create regular income sources after retirement.
• To deal with any kind of uncertainities.
• As the Indian economy will mature, the interest rate and stock market return
will continue to moderate resulting in lower return from investment.

6. ESTIMATE THE RETIREMENT CORPUS
Present Age 35 years
Retirement Age
50 years
Lifespan
85 years
Monthly Expense 35,000
Assumed Inflation rate 6.5% p.a.
Avg. Return (Conservative
Portfolio)
8%p.a.
FV of Monthly Expenses
= 35000*(1.065)^15
= 90000
Retirement Corpus
= 3.2 crores

7. RETIREMENT CORPUS
• Estimated 3.20 cr. covers only the basic day to day living expenses.
• Along with these one must ascertain expenses like – health insurance
premium, home repairs and renovation, social commitments, vacations etc.
• Expenses that are likely to incur post-retirement also include children’s
education and marriage and any outstanding loan.
• Adding these all expenses ,the reasonable retirement corpus would be
somewhere around 5-10 cr.

8. ACCUMULATE AND INVEST
• Income rises as one move up the career graph. This will leave lots of spare
cash every year which can be invested towards retirement goals.
• The power of compounding will multiply the corpus.
• Assuming one save 75000 p.m. for 15 yrs. in a portfolio that generates 10%
returns, the accumulated amount would be more than 3 cr. at age 50.
• It can also be started with 45000 investing per month and increasing 10%
every year.

9. VARIOUS RETIREMENT PLANS TO INVEST
NATIONAL
PENSION
SCHEME
SR. CITIZEN
SAVING
SCHEME MUTUAL FUND
RETIREMENT
SCHEMES
TRADITIONAL
PENSION
PLANS
PUBLIC
PROVIDENT
FUND
ATAL PENSION
YOJANA
EMPLOYEE
PROVIDENT
FUND

10. RULES TO FOLLOW TO MANAGE FINANCE
EFFICIENTLY
• Portfolio Diversification.
• Investing in accordance with lifecycle stage.
• Excessive debt on credit cards and personal loan should be avoided.
• Mortgage loans may be useful in wealth creation. Ex- Home loan.
• Surrender all high premium and low coverage insurance policy like the
Endowment and Money Back plans. Instead opt for Term plan.

11. RULES TO FOLLOW TO MANAGE FINANCE
EFFICIENTLY
• Stay away from pension plans that are highly
illiquid.
• Health insurance is must.
• Repay all debts before retirement.
• Don’t use retirement money for child’s education
if it can be funded through scholarship, education
loan.
• Be extremely patient and disciplined.
Invest
Insurance
Long-term Assets
Guaranteed Income

12. WHAT IF YOU FAIL TO ACCUMULATE THE
TARGETED RETIREMENT CORPUS?
• Move to a smaller house
• Move to smaller city where cost of
living would be more economical
• Reverse mortgage your property
• Rent Arbitrage

13. THANK YOU FOR WATCHING
DEVTECH
FINANCE