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Can one create a superannuation plan? Financial planners say it is possible. And here's how:


Suppose at 30, you can afford to start saving about Rs 1 lakh each year for your retirement at 60. Also, here you can assume just a 5% escalation in annual savings. That is, if you save Rs 1 lakh in the first year, you have to save Rs 1.05 lakh the second year, Rs 1,10,250 the third year, and so on. If you save more, even better.
Now as you save, you go by the thumb rule of 100 minus your age as the percentage of your savings going into equity and the balance into debt. So when you are 30, Rs 70,000 (that is 70% of Rs 1 lakh) goes into equity schemes, and Rs 30,000 into debt. And so on.


Now we assume a 15% long term average return in equity and a conservative 6% from debt. Going by this method, when you are 40, your annual savings will be about Rs 1.63 lakh, of which nearly Rs 1 lakh would go into equity while about Rs 65,000 into debt. And so on.


They say making the first million is the toughest job. The same holds here: Going by the above example and rates, reaching the Rs 1-crore milestone in your superannuation will take you about 19 years. That is, when you are 48 years old, your corpus will be just a tad above the eight-figure mark. From then on, when you are 53, it would be Rs 2 crore, and it would be Rs 3 crore even before you are 56. Soon after you are 57, it would be Rs 4 crore, and when you retire at 60, you are estimated to have a comfortable retirement corpus of Rs 5.8 crore. Although the amount sounds too good to be true, the fact is there is no magic here. It's a combination of discipline and bit of luck.


Now when you retire, even if you put the whole corpus into a fund or an investment product that can give you a post-tax yearly return of a very conservative 6%, you will still have close to Rs 35 lakh per annum.


Now let us see if that takes care of your post-retirement expenses. Suppose your current monthly expenses are Rs 25,000. If the same increases every year at the rate of 8% per annum, just before you retire, the same would be about Rs 2.5 lakh, that is about Rs 30 lakh per annum (please note here that although debt is expected to give a slightly higher rate than that of inflation, to be conservative, we have taken it as lower than the rate of inflation). Now let us suppose that after retirement, your monthly expenses would be about 75% of what it was just before retirement. So your monthly expenses would be about Rs 23 lakh. Compared to your annual earnings of Rs 35 lakh, you will still have Rs 12 lakh extra in your hands.


If you feel comfortable, you can keep on investing even after retirement small portions of your savings in equities, keep growing your retirement corpus and always beat the inflation beast.


A few words of caution here: This is a very simple step-by-step plan to build a retirement corpus.


So please involve your financial advisor or planner to fine-tune this plan according to your own future goals and requirement. Also, you need to take care of your taxes relating to your corpus.

Start@30 - To Retire A Rich


Ø 
Save Rs 1 lakh per annum t100-minus-your-age is the proportion of your equity investment, balance is for debt

Ø  Increase your savings by 5% every year

Ø  Assume 15% average annual return in equity and 6% in debt

Ø  At 40, you will have an estimated superannuation corpus of Rs 29.2 lakh

Ø  At 50, your estimated corpus is Rs 1.42 crore

Ø  When you retire at 60, this would be about Rs 5.8 crore tIf your initial savings amount is Rs 75,000, you end up with about Rs 4.3 crore at 60
And if it's Rs 1.25 lakh, you end up with about Rs 7.2 crore

Ø  If you start at 40 with Rs 1 lakh per annum, your corpus would be just Rs 1.6 crore at 60

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