If you spend ₹2 lakh a month today, guess how much you will need after retirement

Most people are aware that they should begin planning for retirement as early as possible, but few actually do it.

The more you delay, the more pressure it puts on your future savings, because you then need to invest much higher amounts to reach the same goal.

Your current age, the age at which you want to retire, and inflation are the three things that really shape how your plan turns out when it comes to retirement planning.

Your current age basically decides how much time you have left to build your savings.

Your retirement age tells you how long that money will need to support you.

And inflation keeps quietly pushing up your future cost of living, even if your lifestyle doesn’t really change.

If you spend ₹2 lakh a month today, a 6% inflation rate means your expenses will be much higher by the time you retire.

So we will consider two individuals: ages 40 and 50, each planning to retire at age 60

The formula is simple: Current expense×(1+inflation rate)years

How is this calculated for age 40?

• 2,00,000×(1+0.06)20

• (1.06)20 = 3.207

• 2,00,000×3.207 = ₹6,41,400

A 40-year-old will need about ₹6.41 lakh/month

How is this calculated for age 50?

• 2,00,000×(1+0.06)10

• (1.06)10 = 1.791

• 2,00,000×1.791 = ₹3,58,200

A 50-year-old will need about ₹3.58 lakh/month

"Every month you save now is helping your future self. Simple steps to plan your retirement are Think about the kind of life you want after retirement, then estimate how much money you’ll need. Based on that, decide where to invest, how much to invest, and what returns to aim for. Simple, consistent steps today can make your later years comfortable and stress-free," said Certified Financial Planner Shweta Shastri.

Apart from your regular household expenses, retirement planning also needs to factor in healthcare costs and health insurance premiums.

“These are expenses that are likely to rise over time, and realistically, you won’t have much scope to cut corners on them. The biggest advantage, though, comes with starting early,” said Ronak Morjaria, Partner at ValueCurve Financial Services.

Retirement planning is more about starting early, staying consistent, and reviewing your plan from time to time.