The retirement corpus refers to the total amount of money you need accumulated in your investment and savings accounts to retire comfortably without having to work again. It should be sufficient to sustain you throughout retirement, factoring in your life expectancy, inflation, and any potential healthcare or lifestyle expenses. The goal is for your retirement corpus to provide a steady income stream that supports your desired lifestyle, ensuring financial security for the long term.
Inflation: With India’s average inflation rate around 6-7% annually, it’s crucial to plan accordingly.
Investment Returns: The growth rate of your investments impacts how much you need to save.
Healthcare Costs: Rising healthcare costs require significant consideration in your retirement planning.
The 25x Rule
This rule suggests you need 25 times your annual expenses. For example, if you spend ₹10 lakhs per year, aim for a corpus of ₹2.5 crores.
Investment Strategies for Building the Retirement Corpus
The earlier you start investing for retirement, the more you benefit from compound interest. Even small contributions can grow significantly over time. Make it a habit to invest regularly through options like SIPs (Systematic Investment Plans) in mutual funds, or automatic contributions to retirement accounts.
Bonds (Debt Funds): These are safer and offer stable returns. Useful for balancing the volatility of equities.
Real Estate: Long-term real estate investments can provide both capital appreciation and rental income.
Gold or Commodities: Serve as a hedge against inflation and market volatility.
