How much do I need to retire?

Retirement is always something that is kind of fascinating for me. I just have four years of experience in software industry and I think it is kind of enough. It looks dreadful at times. I just want to work for someone and just do something for me which am interested in. I don’t know what keeps me interested and that is a different story altogether. Retirement from the industry means I have made myself comfortable and living a lifestyle that I dreamt of and hope to continue the same till I die.

If I need to retire then how much cash should be in my hands? I know it is very early to even think about retirement but that is how I see things. I need to plan early so that when I do retire, I retire the way I wanted it and if things go as my plan I might even retire early. Retiring means not doing something you love but something that you don’t love to do and do it just for the sake of it and a means to make money. I have seen many people argue with me for hours telling me that they don’t work for money, I don’t agree with them.

Assuming that I make 1 lakh per annum now, then after 5 years the same amount need not be sufficient for me. Assuming that inflation is around 5% then the value of 1Lakh reduces to 75-80k. So when I think of how much money do I need, I have to consider my lifestyle, inflation, emergency situation and gifting others. Why I put gifting as one of the needs is, I see that happen every now and then. When you retire you will have your own family and also your son/daughter will have their own family. You need to be good to them as well, don’t you?

Technology keeps changing at a faster rate than you even take notice of it. So if you are tech-geek who is interested in the gadgets and keep changing them very frequently then you got to ensure that you have enough cash stashed for it as you are going to make some not needed expenses. Why I call buying gadgets as not needed is because it is not necessary but you just fancy having them and have them.

You got to control your spending else it will be a problem for you. So when you are days are golden make sure it is golden rather than making it just another day where in you are trying hard to make the ends meet. Think of the things that you want and how you want to lead your lifestyle. It is of upmost importance as to how your lifestyle is. I am sure that is how you want the rest of your life time to be. If you have enough money today then make sure you have more than enough when you retire.

If you ask me what is a good way to retire then I would suggest investing rather than saving money. Investing will ensure your money grows and yields better results and it beats the inflation. That is a good way to hold on to your money rather than keeping in the bank account. What to invest in is a good question again? I would suggest the least risky investment options such as bonds, CDs and similar investments where in you don’t take any risk at all. Also one more suggestion is buying gold, silver, platinum and other valuable metals.

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6 thoughts on “How much do I need to retire?

  1. Anantha says:

    Bro,

    ‘…When you retire you will have your own family and also your son/daughter will have their own family. You need to be good to them as well, don’t you?’

    I don’t think our children would be grown up enough to have their own family if you are talking about an early retirement [which according to me is late 40s!! and I also know it is next to impossible]. Educational expenses are humongous these days Bro… Plans of early retirement and raising up kids dont go hand in hand… :((

  2. Saravanan says:

    @Anantha: Agreed bro, I was planning to retire around 55 or so. I completely agree with you bro. Things seem so very costly these days. I just wish that I retire when my kids are working and they are ready to rule the world on their own. 🙂

  3. Sudhix says:

    @SP : How can u plan 25-30 years ahead from now?
    Also, say u retire at 50, wat after that?

  4. Saravanan says:

    @Sudhix:

    I know it is difficult to plan for sure things. There is more uncertainty in life. But a rough plan as to where you want to see yourself is a good one.

    What after that? I never said you have to stop doing something. I just dont want to chase money when I say retirement. You can always do something you like.

  5. KK says:

    Adding to your blog content
    >>If you ask me what is a good way to retire then I would suggest investing rather than saving money. Investing will ensure your money grows and yields better results and it beats the inflation. That is a good way to hold on to your money rather than keeping in the bank account.

    Adding to this blog content, investing also gives an opportunity to save on income tax 🙂

    I agree with you. I would like to retire early too, say 40-45.. and probably try to start something on my own, perhaps some small-time business to keep myself occupied, and pursue some hobbies as well (coz otherwise it would become yet another full-time job 😉 )

  6. Saravanan says:

    @KK:

    Agreed dude. Investing “also gives”, you should concentrate on the investing part and not on the saving on tax part while doing investments.

    I too have similar plans of yours to lead the life. 🙂

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