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How Much Money Do I Need At Retirement?

 
 

Each individual has different needs and aspirations and hence their retirement needs vary. While there is no magic formula to compute the retirement needs, there are financial calculators and tools that one can use. Together with meaningful assumptions, one can arrive at a set of numbers that can be considered the retirement goal.

Getting Started

To start your retirement planning, use a retirement calculator or meet a financial advisor to compute your retirement fund value.

Start by considering aspects like your current savings and investments (and how they will grow till your retirement age) and your post-retirement aspirations. One of the main factors to consider is the rate of inflation. Since India is a developing country, the current rate of inflation is higher. However, as the economy matures, the inflation rate could stabilize at 5-6%.

Consider this:

ExpensePresent*After 25 Years (approximately)
Groceries and Supplies5,00017,000
A week-long holiday in Singapore40,000135,000
Medicines and Healthcare3,00010,000
House help4,00013,500

*Can vary from person to person or household to household. Inflation rate estimated at 5%

As highlighted, the current monthly expenses towards medicines and healthcare is Rs. 3,000. However, 25 years from now, this amount can rise up to Rs. 10,000 a month. Also, consider the fact that as one ages, expenses towards healthcare increase.

Hence, in order to be prepared to tackle the rising cost of living, along with insurance cover, one should consider investing in market-linked instruments that have the potential to beat inflation, while at the same time providing cover for your family, incase of demise of the life insured. One such option is a Unit-Linked Pension Plan that also gives you the flexibility to choose where your money is invested.

You can learn more about the Max Life Forever Young Pension Plan. Remember, when it comes to retirement planning, the sooner you start, the lesser you need to save and the bigger corpus you can build.

Unit Linked Insurance Products (ULIPs) are different from the traditional insurance products and are subject to the risk factors. The premium paid in the Unit Linked Life Insurance Policies is subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. Max Life Insurance is only the name of the insurance company and Forever Young Pension Plan(UIN: 104L075V02)is only the name of the unit linked life insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns. Please know the associated risks and the applicable charges from your Insurance agent or the Intermediary or policy document of the insurer. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these funds, their future prospects or returns.For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale. Past performance of the funds does not indicate the future performance of the funds. You may be entitled to certain applicable tax benefits on your premiums and policy benefits. Please note all the tax benefits are subject to tax laws prevailing at the time of payment of premium or receipt of benefits by you. Tax benefits are subject to changes in tax laws.

 
 
 

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