Financial experts warning to middle class: By 2045, just 1 crore will be worth 1 crore, how to retire
How to Calculate retirement corpus in India: Creating a safe fund for retirement in India is considered a security for every middle class family. The retirement fund of ₹ 1 crore has often been considered a safe future guarantee. But, Chennai’s audit expert B.K. Govind Raju has given a warning on LinkedIn like a wake-up call. He says that ₹ 1 crore is no longer a safety net of retirement, but a trap is being made, if you have not planned further from it. This warning makes us wonder why people who retired in India by 2045 need to understand.
How the value of 1 crore will decrease by 2045
B. According to Govind Raju’s analysis, if a person retires at the age of 60 with a fund of ₹ 1 crore and won for 85 years, he will have around ₹ 33,000 every month. This amount may seem right today, but the hit of inflation will reduce it rapidly. He says that in just 10 years, the same ₹ 33,000 will be felt like ₹ 17,500 due to inflation. And by the age of 85, it will fall to less than ₹ 16,000 – which can end only in grocery and maintenance according to today.
This mathematics does not include medical expenses, family’s casual needs, fare (if home is not its own) and other necessary expenses of life. In such a situation, it is clear that a fund of ₹ 1 crore is not enough for a strong retirement, but it can become more ‘net’ than a ‘safety net’. B. This warning of Govind Raju is a wake-up call.
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Dearness, Health and financial literacy
Why is Indian middle class missing enough for retirement:
1. Wrong estimate of inflation: We often do not properly guess future inflation. The prices of goods and services, especially health services, are increasing rapidly, reducing the actual value of savings.
2. ignoring health expenses: There is a huge increase in health expenses after retirement. People often do not sufficiently involve it in their planning, causing unnecessary burden on the retirement funds.
3. Low Financial Literacy: The financial literacy level in India is still relatively low. People do not fully understand the importance of various investment options, inflation effects and long -term schemes.
4. Dependence on non-length properties: Many Indian families invest a large part of their savings in non-property like property. These properties are not easily converted into cash during emergency and often also increases maintenance expenses. Property prices have also increased rapidly, making it even more difficult for the common man to buy a house.
5. Minor increase in income: Property prices have increased rapidly, while the average income has not increased the ratio, which has reduced the ability to buy a house.
The middle class should implement these things for solution
This warning may seem disappointing, but it also gives us an opportunity to consider and strengthen our financial plans:
, Revolution of retirement goals: Give more realistic estimates of the amount required for your retirement, which includes inflation and health expenses.
, Start investing early: Start investing as soon as possible to take advantage of the power of compounding.
, Diversity in investment: Instead of being dependent on property only, bring diversity in equity, date funds, mutual funds and other financial instruments.
, Health Insurance and Emergency Fund: Take a strong health insurance policy and create a separate emergency fund for unexpected expenses.
, Increase financial literacy: Learn more about personal finance, investment and retirement planning.
, Additional Source of Income: Consider creating some passive sources of income even after retirement.
