For all the financial savviness that one might have, numbers still find a way to stump us.
This is what exactly happened with Vaibhav.
“You will need Rs. 25 crores as your retirement fund.” I announced to him after inputting the numbers in the retirement planning calculator. I was working with him on his financial plan.
“What! Really?” was his instant reaction.
“Yes. Why do you seem so surprised? Did you have something else in mind?”
“Well, I had done some back of the envelope numbers for my retirement. But this one is way off what I had got.”
“Hmm. What did you factor in as post retirement inflation and rate of return?”
“Well, I took more aggressive numbers – higher rate of return and lower inflation. Though I understand that it may not be the right thing to do. I also see that my life expectancy assumption at 80 is lower.”
“Yes, that’s a big mistake one can make. My question always is “what if you lived longer?”
“You are right. It’s better to plan for a longer life. Anyways, I guess I now know what I have to prepare for.”
