Do you recognise this picture? That’s right — it’s the story of the ant and the grasshopper. We’ve all heard the tale of the hardworking ant that spends the summer collecting food for the winter, while the carefree grasshopper sings and relaxes. When winter arrives, the ant enjoys the comfort of its well-stocked home, and the grasshopper is left with nothing.
If you think about it, we behave much like these characters. Some people live their best lives in the present — vacations, luxury cars, weekend splurges — spending everything they earn. Our young, pre-retirement years represent summer; retirement is our winter. Some of us are ants, others are grasshoppers.
Warren Buffett, one of the most successful investors in the world, once said:
“If you buy the things you don’t need, you’ll have to sell the things you need.”
We all know that spending everything we earn leaves nothing for the future. We won’t work forever. In fact, many people today aspire to retire early because burnout hits much earlier in their 30s and 40s.
This makes it essential to start planning for retirement early.
Retirement planning has many dimensions — where you’ll live, monthly expenses, medical costs, age of retirement, travel plans, cashflow management, and more. A financial planner can help you construct a realistic, inflation-adjusted post-retirement budget after factoring in these contingencies. Based on this, the required retirement corpus can be calculated.
Once the target corpus is clear, systematic and lump-sum investments can be structured to ensure you reach that goal comfortably.
Global life expectancy is projected to rise from 73.6 years in 2022 to 78.1 years by 2050 — an increase of 4.5 years. With India being a developing economy, inflation is likely to remain in the 4–6% range. This means there is a very real risk of outliving one’s retirement corpus.
We, certified financial planners, at Surana Financial Services LLP can help you create a roadmap that ensures your money lasts as long as you do — and ideally, even longer.