[00:02] complete freedom in life after retirement. No tension of the boss, no fuss in the office, a fixed income should keep coming into the account every month. A solid pension.  And when we talk about retirement security, one figure that comes to mind is ₹50,000 per
[00:18] month.  But often people get confused here. This Rs 2.5 lakh is not today's value but This Rs 2.5 lakh is not today's value but future value.  That means, if we consider 6% inflation, then after 2025 years from today, Rs 2.5 lakh will be equivalent to approximately Rs 58 to 78,000 per
[00:35] month today.  So whether you are in the IT sector, a doctor or running your own business. Today we will see how this target can be achieved at the age of 35, 40 or 45.  Now let's
[00:47] come to the most exciting part of the video. Real case studies.  We will look at three different Real case studies.  We will look at three different age groups 35, 40 and 45 years. And there will be two scenarios in each age group. One where you are starting from absolutely zero
[01:00] and the other where you already have a corpus of ₹1 lakh available. In all the examples, we are assuming that you will increase your SIP by just 6% every year, which is very easy for every working person or professional.  So
[01:16] Case Study One Age 35 Time Horizon of 25 years. If you are 35 years old then the biggest advantage you have is the long time of 25 years.  So scenario a fresh start.  Let's assume you are starting from zero today
[01:32] and we expect an average annual return of 12% from equity funds. You will have to start with around ₹29,100 per month.  Every year you have to increase your SIP
[01:44] amount by just 6%.  Like next year around ₹3850.  With this 12% return in 25 years and 6% step up, your total corpus at the age of 60 will be ready to be
[01:57] your total corpus at the age of 60 will be ready to be around ₹7 crore 80 lakh.  After retirement, when around ₹7 crore 80 lakh.  After retirement, when you start a systematic withdrawal plan of ₹50,000 per month from this corpus of ₹7 crore 80 lakh you start a systematic withdrawal plan of ₹50,000 per month from this corpus of ₹7 crore 80 lakh
[02:11] and increase the SWP by 6% every year as per inflation.  That means ₹265,000 next year and so on.  And even if the portfolio is kept at a conservative 8% return, even if the portfolio is kept at a conservative 8% return, this money will last you comfortably till the age of 85 to 90.
[02:25] Scenario B Head start of ₹1 lakh. Now see the magic if you already have ₹1 lakh in any mutual fund or investment today.  This ₹1 lakh will silently compound at a 12% return for the next 25 years
[02:38] and will alone create a solid base of approximately ₹1 crore 70 lakh by the age of 60. alone create a solid base of approximately ₹1 crore 70 lakh by the age of 60. Because of this head start, your monthly burden now reduces drastically.  Now you will have to start your monthly SIP at
[02:53] just around ₹2,800 instead of ₹29,100 step-up SIP of ₹2,800 and the old ₹1 lakh, the same
[03:08] targeted corpus of ₹7 crore 880 lakh will be ready at the age of 60.  With this ₹780 lakh, you can start an inflation-adjusted SWP at ready at the age of 60.  With this ₹780 lakh, you can start an inflation-adjusted SWP at ₹250 per month from the age of 60 without any tension, ₹250 per month from the age of 60 without any tension,
[03:24] which will continue till you are 85 to 90 years old at a conservative 8% post-retirement return. So the lesson is that a small existing investment of ₹1 lakh is that a small existing investment of ₹1 lakh
[03:39] Case Study to Age 40 20-year time horizon.  If you are 40 years old, you have a time horizon of 20 years till the age of 60. Scenario A Fresh Start. If you are starting from scratch today and expect an average annual return of 12%
[03:55] because you have 5 years left compared to the age of 35.  You will have to start at around Rs 57,500 per month.  Keep increasing your SIP by 6% every year.  For
[04:08] month.  Keep increasing your SIP by 6% every year.  For example, next year approximately ₹60,950. In 20 years, with 12% return and 6% step up, your total corpus at the age of 60 will be approximately ₹7 crore 80 lakh.
[04:22] After retirement, when you start a monthly SWP of ₹2,50,000 from this ₹7 crore and at 6% annual inflation step up, then at post retirement constructive 8%
[04:34] return, this money will keep giving you comfortable income every month without stopping till you are 85 to 90 years of age. Scenario B Head start of ₹1 lakh. Now see if you already have an investment of ₹1 lakh ready.  This ₹1
[04:48] lakh will compound at 12% returns for the next 20 years and will alone alone create a solid base of around ₹96.5 lakh by the age of 60.  Due to this head start, your required starting SIP
[05:03] starting SIP reduces from ₹57,500 to around ₹400 per month.  6% with annual step up.  The old ₹1 lakh and this step-up SIP of ₹50,400 combined will create the same targeted corpus of ₹780 lakh at the age of 60.
[05:19] create the same targeted corpus of ₹780 lakh at the age of 60. With this ₹780 lakh, your inflation adjusted SWP of ₹50,000 per month will continue to grow safely and continuously till the age of ₹85 to 90 years.  A head start of ₹1 lakh
[05:38] Study 3 Age 45 Time horizon of 15 years. Now let's talk about those who are 45 years old and have only 15 years of time window left till the age of 60.  Scenario A Fresh Start.  Starting from zero and targeting the same 12% annual equity growth.
[05:55] Due to the shorter time frame, you need a starting SIP of around ₹12,000 per month with 6% annual step up.  If ₹1,20,000 seems a bit heavy to start with, then
[06:07] ₹1,20,000 seems a bit heavy to start with, then increase the annual step up to 10% instead of 6%. Your starting SIP will drop to around ₹95,200 per month.  With 12% return and step up in 15 years,
[06:21] your required targeted corpus of Rs 7.8 crore will accumulate at the age of 60. Systematic withdrawal of Rs 2.5 lakh per month from this Rs 7.8 crore at 6% inflation adjusted conservative 8%
[06:35] post retirement return will continue smoothly till you reach the age of 85 to 90 years. Scenario also a head start of ₹1 lakh.  If at the age of 45 you already have ₹1 lakh invested.  This will compound at 12% rate over 15 years and
[06:52] create a base of approximately ₹54470 lakh.  Now instead of ₹1,20,000, you will have to start SIP instead of ₹1,20,000, you will have to start SIP SIP of ₹1,12,000 and a compounded base of ₹1 lakh will together
[07:09] together collect a total of ₹780 lakh by the age of 60.  The same ₹780 lakh collect a total of ₹780 lakh by the age of 60.  The same ₹780 lakh corpus will give you a fixed inflation adjusted income of ₹50,000 per month from the age of 60 corpus will give you a fixed inflation adjusted income of ₹50,000 per month from the age of 60
[07:24] So you see, the whole game is about only two things. Time and head start.  The earlier you start, the less your monthly SIP will increase.  90% of people make a big mistake in retirement planning.  He does
[07:42] understand this with a simple example.  Option One Fixed SWP.  Suppose at the time of retirement you say that I just want a fixed amount of ₹250,000 every month.  For the first two to three years, you will find this ₹250,000 very comfortable.  But
[07:57] after 10-12 years, when inflation increases, the same ₹2,50,000 will not be able to meet even the daily expenses of your household because the purchasing power of the money will have reduced. Option to Inflation Adjusted SWP The Real Pension.  That is why sensible planning
[08:13] means an SWP that keeps increasing every year with inflation.  Let us assume that according to 7% inflation, we increase our SWP by 7% every year.  In Year One, monthly withdrawal will be ₹250, in Year Two, monthly withdrawal will be ₹267000,
[08:30] in Year Three, ₹286000, in Year Four, ₹36000 and in the 20th year, monthly withdrawal will be around ₹965000. Now if you have watched this video till here then first of all a big thank you. If you find the content ineffective,
[08:46] please write a short nice video in the comment box.  This is the only motivation I get from you.  By now we have understood how to set a retirement target and accumulate a corpus according to our age. But after achieving the target,
[09:01] how to invest all this money.  Let us understand this in very simple language.  The Four Bucket Strategy.  The biggest mistake after retirement is to keep all your money in one place. For this we use the four bucket strategy.  Bucket number one is immediate
[09:16] income.  For expenses over the next two to three years, your monthly SWP continues without any disturbance.  Bucket to
[09:28] Stability.  Spend the next 4 to 7 years refill Bucket One when the time comes.  The money invested in Bucket Three Growth over the years is money invested in Bucket Three Growth over the years is
[09:43] inflation can be continuously beaten through compounding. Bucket for Emergency and Medical. A dedicated medical and emergency fund, completely different from SWP.  Understand the golden rule. medical and emergency fund, completely different from SWP.  Understand the golden rule.
[09:58] Because if an emergency occurs, your entire retirement structure will be disturbed. So now let's understand the risk of sequence of returns.  Understand this shocker with a simple example.  There are two investors, Investor A and Investor B.  The
[10:11] investment amount of both is the same and the overall average market return of 20 years is also exactly the same i.e. 10%.  But surprise, Investor A gets good positive market returns in the initial five years of retirement. Investor B's bad
[10:25] luck leads to a market crash within the first five years of retirement, despite the market crash, Investor B was selling SWP units every month to meet his expenses.
[10:37] B was selling SWP units every month to meet his expenses. his corpus gets damaged so severely that even if the market recovers at double the speed, Investor B's entire corpus will be exhausted 10 years before Investor A.  The
[10:54] average return was the same but the bad luck of the first 5 years ruined the entire retirement life.  To eliminate this danger, we use the bucket strategy so that when the market falls, you do not have to withdraw even ₹1 from the equity.  So friends, whether it is
[11:11] early retirement, a new house, a car, the right insurance or an emergency fund.  Financial planning is not just about making numbers fit. This includes major factors like taxation and market risk. Like coding is the job of a software engineer.  Similarly, it is the
[11:24] job of a software engineer.  Similarly, it is the planning on their own, people often make wrong decisions and lose lakhs of rupees in hidden commissions. I am a Certified Financial Planner, Ex-Banker and Personal
[11:38] Finance Coach.  No one sells a product that saves you more money in hidden charges than my fees through Direct Funds. If you want a solid, unbiased roadmap for your goals,
[11:55] Visit TheArtOfWealthBding.com or check the description and pend comments.  Make sure to hype this video by liking and sharing it so that more people can learn and watch it now by clicking on the popular videos shown on the screen. See you in the next
[12:09] See you in the next video.  Jai Hind.  God bless you all.