It is advisable to begin planning for retirement with your current job if you want to comfortably enjoy your old age. Before preparing for retirement, it is essential to calculate the amount of funds required to support yourself during that time and then strategize your investment plan accordingly.
Before beginning the retirement planning process, it is crucial for individuals to consider these important points. By doing this, you can also accumulate wealth like Kubera for yourself even in your old age. Currently, a sum of Rs 1 crore may appear substantial, but its value is expected to decrease in the future. With this in consideration, it is important to contribute a sufficient amount of money that will hold a valuable significance during your retirement, and then determine an appropriate savings and investment plan.
The question now is, how can you determine the future value of your savings over a specific period of time? The Rule of 70 can assist you with this. It indicates when your deposit will decrease by half in value. To do this, you need to have knowledge of the present inflation rate. Dividing the current inflation rate by 70 will show you how many years it will take for the value of your total savings to decrease by half.
Imagine if the inflation rate right now is at 6 percent. In this scenario, divide 6 by 70 using the formula. The amount in savings will be reduced by half in approximately eleven and a half years, based on a calculation of 70 divided by 6 equaling 11.66. If one crore rupees are required for a comfortable life today, in approximately eleven and a half years, two crore rupees will be needed as the value of one crore will decrease to 50 lakh rupees. By making these calculations, you should have an understanding of the savings needed for retirement.