Retirement Planning: Rs 3.6 crore can give you Rs 93,000/month. Is this enough?

Capitalstars Investment Advisor

Some of the common aims for which Indians save money include funding their children’s education, establishing or funding their own business, investing in property and supporting parents or relatives financially.

A report by Standard Chartered shows that most of the Indians with enough disposable income to save and invest have a huge opportunity to realize their aspirations for retirement. And, around 32 percent of them are already on track to achieving more than half of their wealth goal at the age of 60. For the remaining 68 percent, who are further away, it is still possible to narrow the gap with well-defined goals and a considered wealth management approach.

The Standard Chartered Wealth Expectancy Report 2019 says that the average wealth expectancy of those in India with enough disposable income to save and invest is Rs 3.6 crore (USD518,000), or Rs 1.3 crore for the emerging affluent, Rs 2.6 crore for the affluent and Rs 6.9 crore for HNWIs.

These savings will give them Rs 93,000 per month to live on during retirement. This would be much less than both their current income and their wealth aspiration. If these individuals spend their retirement fund (mentioned above) at the average monthly rate to which they aspire, their wealth expectancy would last six years for emerging affluent, 9 years for the affluent and just 5 years for this.

The report has examined the saving and investment habits of 10,000 emerging affluent, affluent and high-net-worth individuals (HNWIs) across 10 fast-growing economies.

The study shows that there is a strong appetite among Indian savers to learn more from reputable sources and experts when it comes to making their money go further.

The report said, “Indian wealth creators plan ahead: three in five (60 percent) have a financial strategy that includes investment products. Despite this, half (49 percent) of India’s wealth creators still feel very far away from their top financial goal.”

“77 percent of Indian wealth creators believe money is essential to happiness, more than in any other market in our study. In fact, wealth is considered so important that many Indian wealth creators are anxious about their financial future: 64 percent of the affluent group say they worry so much about money that it affects their health, and 62 percent of the emerging affluent feel so overwhelmed by financial planning they fail to put a plan in place at all. The emerging affluent are also the least likely group in India to seek professional investment advice,” the report added.

Can you maximize savings?

Steve Brice, Chief Investment Strategist for Standard Chartered Private Bank, says: “Research shows most retirees fall short of their income and wealth goals. The ‘wealth expectancy gap’ arises in part from our failure to assiduously plan for our financial future.”

Hence, he suggests that the sooner you start saving, the faster you will reach your aspirations. “Securing your financial future starts with a well-thought-out plan, mapped to your life goals. The next important step is to save and invest early. Finally, by diversifying your wealth across various investment solutions, you have the potential to generate better risk-adjusted returns, putting you on the path to a worry-free retirement,” says Brice.

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