WATCH THIS to retire COMFORTABLY! | How much money do we need? | Retirement in 40s? #rahuljain

2 money rules you need to know to retire comfortably.:

1 - Rule of 25x

This means that if your annual expense is 10 lacs, you need 25 times of 10 lacs, that is 2.5 crores at the time of retirement.

Now why 25x?

Because of rule number 2 that is rule of 4X

So as per rule of 4x, you can withdraw 4% from your retirement money for your spending for rest of your life.

Again taking the same example, if you build 2.5 Cr for your retirement, 4% of 2.5 crore is 10 lacs which is your annual expense.

And 4% of withdrawal will come from investing this 2.5 crore at 4% return which is a guaranteed return that you can get from FDs no matter what the FD rates are.

So by using 4% rule, you can still leave 2.5 crs for your kids.

[Andres_]

Retirement seems so much harder now than it was a decade ago. The rising cost of living, inflation, and unpredictable markets are making it impossible to calculate a safe number

[retirewithrohit]

Unfortunately, these rules dont apply to Indian scenarios.

[rpsarathi]

Yes. As some others said, Inflation & Old Age Medical Expenses will require at least another 2.5 crores Buffer.

[alverzenongkhlaw]

This is unbelievable..must get down to.some serious thinking now...Many thanks to the teacher..I will never forget this valuable advice..

[rohanp]

Doesnt take into account growinf expenses in terms of medical expenses which will grow, and no insurance will cover you in old age, and even if you have insurance rhe premiums are not constant, they will keep going up adding to your expenses

[sandipanroychowdhury]

How is that possible?
You are not considering inflation

[PankajKumar-ojpr]

Current 10lakhs will not be same after retirement, so inflation to be considered in the calculation

[trstrscit]

u can retire and after 20 years u can catch hold of this guy

[atanumandal]

Return on Corpus required is 4%+inflation rate...
So if you take a 6% inflation rate... you need a return of 10% on your Retirement Corpus.

[ashobiz]

The world is filled with people who live by paycheck by paycheck and lead decent life untill they die.

[agytjax]

All these "advices" need to taken with a pound of salt. If you are 25 now and 65 years (age of retirement) is 40 years away. By that time, India would already be in the middle income countries. getting 4% return on in a middle income country is tough. In China, FD rates is 1.5 % and in Malaysia it is around 2% ! As the per capita income rows, the inflation comes down and so does the FD rates. So the best option is to stay invested in good low risk equity mutual funds (that is assuming companies like Reliance and Tata group would still be around). While planning for retirement is a great advice; one should also review their portfolio via-a-vis the countries economy and rebalance it. How you adapt is the key

[benjoseph]

Normal inflation and lifestyle inflation left the chat.

[vneo]

For Indian context, it's 33x corpus and 3% withdrawal. Check research done by indian fin entrepreneurs. 25x and 4% is western rules...

[kapilkant]

you have 100rs and need 4 percent per year (considering inflation its percentage and not rupees) then returns rate should be (4+inflation rate) so that both your principal and withdrawal stay inflation adjusted

[akhiljoshi]

Returns should be 10% adjusted for inflation

[VKINVESTMENT]

Rahul Bhai 4% and inflation kaha gayi. 7% interest milega 4% expense and balance 3% reinvestment. With time this gap will narrow down and we will be close to end of life too 😊

[rangavijay]

How will the current 10L expensese will be same after retirement?
Dont we consider inflation and increase in our exp??😢

[saurabhrawat]

What about inflation? This rule assumes 10% return and 6% inflation

[ranjithsukumaran]

Adjust inflation, so this amount will translate to 30 lacs expense per annum, for a 40 year old now, at his age 60.

In that case you will need 7.5 cr. So at 4%, you will get 30 lacs per annum


Good concept, 👍

[revanth]

Today's living cost is not equal to after 25 yrs living cost.... considering inflation today 10 l is sufficient today means 3*10=30 l is sufficient for after 25 yrs