Several of you have written in recently. Some of you are fifty-five and just found this column. Some are retired schoolteachers, homemakers whose husbands have recently stopped working, women who spent decades managing households and are now wondering what their own financial future looks like. And some of you, in your thirties and forties, are reading this and thinking: that is not me yet.
This column is for all of you. But especially for the ones who think it is not them yet. Because the most powerful factor in retirement planning is not the instrument you choose or the return it earns. It is time. And the younger you are as you read this, the more of it you still have. The best time to start planning for retirement was the day you received your first salary. The next best time is today. Let us begin with the one question most people never answer: how much money do I actually need?
Calculating Future Costs
Think about what you spend every month right now to live comfortably. Include everything: household expenses, groceries, electricity, school fees, medicines, small luxuries. Say that number is forty thousand rupees a month.
The Inflation Reality
Here is what most people miss. That forty thousand rupees today will not be forty thousand in twenty years. At an average inflation of six per cent, it becomes approximately one lakh twenty-eight thousand rupees a month. That is what your retirement lifestyle will cost two decades from now. To sustain that income for twenty-five years of retirement, you need a corpus of roughly three to four crore rupees at the point you stop working.
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Planning for Women's Longevity
That number is not meant to frighten you. It is meant to give you a target. A person with a target can plan. A person without one can only hope. Now here is something this column needs to say specifically to women.
Bridging Career Break Gaps
Indian women live, on average, three years longer than men. In 2024, life expectancy for women in India was nearly seventy-four years, compared to seventy-one for men. That gap means a woman's retirement corpus needs to last longer. It means she cannot afford to plan conservatively. And it means she needs to be in charge of her own retirement planning, not dependent on a plan built around someone else's life expectancy.
Building Wealth in Your 20s & 30s
There is another reality most retirement planning ignores entirely. Women take career breaks. For children, for caregiving, for relocation after marriage, for family illness. Every break is a pause in EPF contributions, SIP consistency, and NPS accumulation. A woman who took three career breaks of two years each has, in effect, six fewer years of compounding than a man who worked continuously. She needs to compensate, often by starting earlier, investing slightly more when she is working, and never withdrawing from retirement accounts during breaks even when income is disrupted. Now, how do you build toward that retirement number?
Balancing Growth in Your 40s
For those in their twenties and thirties, equity is your greatest ally. A SIP in a diversified equity fund or index fund, started early and increased every year as income grows, is the most powerful tool available. EPF, deducted automatically from your salary, is quietly building a corpus. Keep your nominee updated and if you change jobs, transfer your EPF rather than withdrawing it. Even a withdrawal of a few lakhs early in your career can cost you multiples of that amount at retirement because of the compounding lost. NPS, the National Pension System, offers additional tax benefits over and above the eighty C limit and enforces long-term discipline that many investors struggle to maintain on their own.
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Generating Income in Your 50s & Beyond
For those in their forties, you still need equity. Retirement at sixty means your money must last until eighty-five or longer. Moving entirely to fixed deposits in your forties means your corpus will not grow fast enough to sustain those years. Keep a meaningful equity allocation, but also get specific about your number. What you need at retirement versus what you have today is your action plan. The gap between those two is simply a savings target.
Ensuring Financial Independence
For those in their fifties or already retired, the focus shifts to making the corpus last and generating reliable income. A Systematic Withdrawal Plan from a balanced mutual fund lets you withdraw a fixed monthly amount while the remaining corpus continues to grow. The Senior Citizen Savings Scheme offers quarterly income at rates currently higher than most fixed deposits and is government-backed. The Post Office Monthly Income Scheme is another reliable option for regular income. The goal in this phase is not maximum growth but sustainable income that adjusts for inflation over time.
Your Immediate Action Plan
One thing that is true at every stage of life: a woman's retirement plan must be in her own name, her own account, her own folio. Not a joint account that requires someone else's signature. Not a plan that exists in her husband's paperwork. Hers. Because a retirement plan you cannot access independently is not a plan. It is a dependency. This week, write down two numbers. The first is your current monthly expenditure. The second is what you think you will need per month at retirement, adjusted for inflation. The gap between those two numbers, multiplied over the years until retirement, is the most useful financial calculation you can do.
Everything else we discuss in retirement planning flows from knowing that number. Next week, we talk about the piece of retirement that nobody plans for and everybody eventually faces: your health, and what it costs when it goes wrong.
The best gift you can give your future self is the decision you make today.
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