“Will My Money Really Last?”
A Real Retirement Conversation Between Ravi and Vikas
Ravi looked uneasy as he stirred his tea.
“Vikas, I’m 35. Private sector job. No pension. EMIs, school fees, rising expenses… honestly, retirement feels like a moving target.”
Vikas smiled.
“That feeling is more common than you think, Ravi. Let’s make this real—with numbers you can relate to.”
Rule 1: Start Early — Time Is Doing More Work Than You Think
“How much do you save for retirement today?” Vikas asked.
“Mostly EPF,” Ravi replied. “Around ₹7,200 a month from my side, same from my employer.”
Vikas nodded.
“That’s ₹14,400 a month, or about ₹1.7 lakh a year. Now here’s where time plays magic.”
He continued,
“If you’re 35 today and continue contributing till 60, assuming:
Salary grows at 6% annually
EPF earns ~8% per year (historical average)
You could accumulate ₹1.5–1.7 crore only from EPF.”
Ravi looked surprised.
“And if you had started at 25 instead of 35?” Vikas added.
“The same contributions could have crossed ₹3 crore.”
“So delay cost me half the money?” Ravi asked.
“Yes,” Vikas replied calmly.
“Time penalises late starters and rewards early ones.”
Rule 2: What Will Retirement Actually Cost You?
Vikas asked,
“What are your monthly expenses today?”
“Roughly ₹50,000,” Ravi replied.
“Good. Now let’s project this forward realistically.”
Vikas explained:
Inflation assumed: 6%
Retirement age: 60
Life expectancy: 85 (25 retirement years)
“Your ₹50,000 expense today becomes roughly ₹1.6 lakh per month at age 60.”
Ravi blinked.
“That’s nearly ₹19 lakh per year,” Vikas continued.
“To fund this for 25 years, assuming post-retirement returns of 6–7%, you need roughly ₹3.5–4 crore as retirement corpus.”
“And this,” he added,
“still excludes:
Children’s higher education
Marriage expenses
Home upgrades
Major medical emergencies”
Ravi leaned back. “That’s eye-opening.”
Rule 3: Salary Grows. Expenses Grow. Investments Must Grow Too.
Vikas asked,
“How much are you investing outside EPF?”
“About ₹10,000 per month in SIPs.”
“That’s a good start,” Vikas said.
“But let’s see the impact of stepping it up.”
Scenario A: No Step-Up
SIP: ₹10,000/month
Return: 10%
Tenure: 25 years
Corpus: ~₹1.3 crore
Scenario B: 10% Annual Step-Up
Same SIP
Same return
Same tenure
Corpus: ~₹3.2 crore
“That’s more than double,” Ravi said.
“And you didn’t increase effort—just aligned investments with income growth,” Vikas replied.
Rule 4: Compounding Breaks When You Interrupt It
“Every time you stop, withdraw, or pause investments,” Vikas said,
“you’re not just losing money—you’re losing future growth on that money.”
He explained with a simple example:
₹5 lakh withdrawn at age 35
That same amount, left invested at 10%, could become ₹54 lakh by age 60
Ravi frowned.
“So small withdrawals today are expensive tomorrow.”
“Exactly.”
Rule 5: Asset Allocation — Stability Matters More Than Returns
Vikas continued,
“Returns don’t come from guessing markets. They come from staying invested through cycles.”
He explained a realistic allocation:
Age 35: ~65% equity
Age 45: ~55% equity
Age 55: ~40% equity
Post-retirement: ~25–30% equity
“This reduces the risk of retiring during a market crash and protects your lifestyle.”
“So it’s not about chasing the best fund?” Ravi asked.
“No,” Vikas smiled. “It’s about not panicking at the wrong time.”
Rule 6: Children Can Take Loans. Retirement Cannot.
Ravi hesitated.
“But my daughter’s college education will cost at least ₹20–25 lakh.”
“True,” Vikas said.
“But education loans exist—and they come with tax benefits under Section 80E.”
He continued,
“Your daughter will have 30–35 earning years ahead of her.
You will have zero earning years after retirement.”
Ravi nodded slowly.
“Support your children,” Vikas said,
“but don’t make yourself financially dependent on them later.”
The Real Takeaway
Ravi smiled for the first time.
“So retirement planning isn’t about finding the highest return product?”
Vikas shook his head.
“It’s about:
Starting early
Increasing investments gradually
Staying invested
Protecting compounding
Planning realistically, not optimistically”
He paused and added,
“In retirement planning, time and discipline matter more than brilliance.”
Disclaimer – This article is for educational purposes only. Numbers are illustrative and based on reasonable assumptions. Actual outcomes may vary depending on market performance, inflation, and individual behaviour. Please consult a qualified financial advisor before making investment decisions.
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