Retirement — that far-off phase we imagine as a peaceful escape from the daily grind. No more rushing to work, chasing deadlines, or worrying about money. Or so we think.
For most of us, retirement feels like a distant dream. A calm, ideal future. Yet surprisingly, few Indians are preparing for it. The latest survey conducted by the IRIS indicates that less than a quarter of Indians are confident of having their savings last over 10 years into retirement.
Why this gap?
For generations, Indian workers have relied on stable, pensionable jobs. You worked steadily through your career, and a government or employer-backed pension took care of the rest.
Today, that world is gone.
Careers are uncertain, layoffs common, and pensions increasingly rare. Most of us will have to fund our own retirement — from what we save and invest during our working years.
However, this is far from easy. Why? Three reasons:
Knowing how much does one need to save before retiring
Knowing how to invest to reach the retirement amount
Knowing how to withdraw with care, so that the monies last your lifetime
So, how much do I need before I retire?
Despite the popular perception, this is not a simple question.
The answer depends on at least 7 different factors, a majority of which are uncertain or difficult to predict. But three stand out:
Your future monthly expenses — driven by your lifestyle choices.
How long you’ll be retired — which depends on when you stop working, and how long you live.
Your investment returns vs. inflation — which depends on both how you invest and future cost inflation.
Working through these questions is challenging. It requires clarity about your current finances, foresight about the future, and confidence in investing.
To help simplify this, we built a visual retirement calculator. Try it out — see what number it gives you. Is it what you expected?
In the next post, we’ll tackle the second big challenge: how to invest wisely for retirement.