Is 15 Crore a Sufficient Amount for Retirement at 31?

Is 15 crore enough to retire comfortably when you are 31? This is a question that many people ask, especially when considering their financial goals and future.

Factors to Consider

Many experts suggest that if you can live on 10 lakhs or less per month, then 15 crore could be a sufficient amount for retirement. However, this number is highly dependent on several factors, such as your current monthly expenses and future inflation rate.

Assumption and Calculator Analysis

Let's use an SWP (Systematic Withdrawal Plan) calculator to analyze this. Assuming an interest rate of 10%, the corpus will grow over time. By the time you are 61 years old, you might have over 55 crores for major events like your child's marriage. This is impressive, but can you maintain this lifestyle?

Assuming your current monthly expenses are one lakh (1,00,000 INR), that translates to 12 lakhs per annum (12,00,000 INR). Considering an inflation rate of 6%, your purchasing power will decrease over the years. Specifically, one lakh in 30 years will only be worth about 5,74,000 INR. This means you'll need approximately 70 lakhs (7,00,00,000 INR) per annum to maintain this lifestyle when you retire at 60. To get this amount, you would need a corpus of around 11 crores (11,00,00,000 INR) at a 7% return.

However, this is just a simple calculation, and the reality may be quite different. Inflation can be higher than anticipated, and your expenses might increase according to inflation. Every year, your expenses will be compounded by the inflation rate, which means you need a significantly higher corpus to sustain your lifestyle.

Retirement Income Strategy

Considering the future compounding effect due to inflation, a more practical strategy could be to find an investment instrument that can give you a fixed 10% return annually while allowing you to withdraw 4% of the corpus annually. This way, you can use the withdrawn amount to cover your health expenses and other needs.

Your 15 crore would yield 1.5 crore annually (15,00,00,000 INR * 10%). If you can withdraw 60 lakhs annually (6,00,00,000 INR), which is roughly 4% of the corpus, you will still have 15.9 crore (159,00,00,000 INR) at the end of the first year. The next year, you will have 1.59 crore (159,00,000 INR * 10%) from your investment, and you can withdraw 63.60 lakhs (6,36,00,000 INR). This strategy will ensure your corpus grows annually, while your withdrawals cover your expenses.

Key Takeaways

Is 15 crore a sufficient amount for retirement? This largely depends on your current and future expenses. The SWP calculator shows that 15 crore might be enough for your needs, but you must consider the impact of inflation and future growth in expenses.

Remember, this analysis is a starting point, and professional advice is crucial. Consider consulting with financial experts to tailor a retirement plan that best suits your needs and goals.