Retirement Planning

You might be thinking-

“Bro, I haven’t even started earning properly.”
Fair.

But here’s the uncomfortable truth 👇

• You will not work forever
• You will still need money when you stop working
• India does not give everyone a pension
• Medical bills don’t care about your age

SO… WHAT EVEN IS RETIREMENT PLANNING? 🧠

🧾 Simple Definition-
Retirement Planning = Making sure future-you can pay bills without a salary.
That’s it. No drama.

In real life, it means planning for-
• Food 🍛
• Rent / home maintenance 🏠
• Medicines & hospital bills 🏥
• Travel & hobbies ✈
• Zero dependence on kids 🙅

📌 Retirement = life after paychecks stop.

WHY IT MATTERS IN PRESENT-DAY INDIA 🇮🇳 (CURRENT SCENARIO)
Let’s zoom out for a second 👀

🌍 Reality	🧠 What It Means for YOU
⏳ People live till 75–85	Your savings must last for decades, not just retirement day
🏠 Nuclear families	Less family support — more self-dependence needed
💼 Gig & contract jobs	No fixed pension or guaranteed income later
🏥 Medical inflation	Health costs rise faster than salary and savings
⚠️ Job uncertainty	Backup planning and self-reliance are essential

👉 Translation- You are your own backup plan.

🟢 STEP 1- Decide WHEN YOU WANT TO STOP DEPENDING ON A SALARY
Ask yourself-
“At what age do I want the freedom to not need a job?”

Common options
• Normal retirement → 60–65
• Early retirement (FIRE) → 40–50
• Flexible retirement → work less later

📌 Earlier freedom = more planning needed.

🟢 STEP 2- Imagine Your RETIREMENT LIFE
Before numbers, imagine your lifestyle

• City or hometown?
• Owned house or rent?
• Travel or quiet life?
• Comfort vs luxury?

📌 Retirement planning starts with life design, not calculations.

🟢 STEP 3- Estimate Your MONTHLY EXPENSES (TODAY’S VALUE)
Include

• Food & groceries
• Electricity, phone, internet
• House maintenance / rent
• Medical expenses
• Travel & fun

💬 Rule of thumb-
Retirement expenses ≈ 70–80% of your current lifestyle cost
(or more if you like comfort).

🟢 STEP 4- Understand INFLATION (The Silent Villain 😈 )
Inflation = prices increase over time.

Example
• ₹30,000/month today
• After 30 years → ~₹90,000–₹1,00,000/month

📌 Retirement planning is about future prices, not today’s.

🟢 STEP 5- Find Your RETIREMENT CORPUS
Corpus = the total amount of money you need by retirement day.

Think of it as-
A big water tank that must last your entire retired life.

Depends on
• How long you live
• How much you spend yearly
• Inflation
• Investment returns

🟢 STEP 6- Use a SIMPLE CHECK – FIRE RULE 🔥

To avoid scary math, use this shortcut-
FIRE Number = Annual Expenses × 25

Example
• Annual expenses = ₹6,00,000
• FIRE corpus ≈ ₹1.5 crore

🧠 Vocabulary
• Withdrawal rate = how much money you take out yearly
• 4% rule = assumed safe yearly withdrawal

⚠ This is an estimate, not a guarantee.

🟢 STEP 7- Decide WHERE TO KEEP YOUR MONEY
You don’t keep all retirement money in one place.

Common buckets-
• EPF / PPF → Safety
• Mutual Funds → Growth
• NPS → Pension income
• Insurance → Protection

📌 Smart planning = mix of safety + growth.

🟢 STEP 8- PROTECT YOUR PLAN FROM MEDICAL SHOCKS 🏥
One major hospital bill can destroy years of savings.

So you need
• Health insurance
• Emergency fund

📌 Health insurance = retirement shield.

🟢 STEP 9- PLAN HOW YOU’LL USE MONEY AFTER RETIREMENT

After retirement
• You stop earning
• You start withdrawing

Options-
• Monthly pension (annuity)
• Regular withdrawals
• Combination of both

📌 Saving is important, withdrawal planning is equally important.

🟢 STEP 10- DECIDE WHO GETS YOUR MONEY (ESTATE PLANNING)
Estate Planning = deciding what happens to your money after you.

Includes
• Writing a Will
• Adding nominees
• Avoiding family disputes

💬 Estate planning is about clarity, not death obsession.

🟢 STEP 11- REVIEW & UPDATE (LIFE CHANGES)

Life changes
• Salary increases
• Marriage
• Children
• Medical situations

📌 Retirement planning is not one-time. Review it once a year.

🧠 What is FIRE?
FIRE means-
“I have enough money invested that I don’t NEED a salary.”

You live on investment income, not jobs.

🔢 FIRE NUMBER (YES, THIS IS THE CALCULATOR PART)
FIRE Number = Annual Expenses × 25

Example-
• Monthly expense- ₹50,000
• Annual = ₹6,00,000
• FIRE corpus ≈ ₹1.5 crore

📌 Based on the 4% Safe Withdrawal Rule.

🧠 Vocabulary Decode-
• Withdrawal rate = how much you take out yearly
• Safe = money lasts ~30 years (not guaranteed)

⚠ FIRE is powerful but risky if-
• Markets crash
• Healthcare costs rise
• Lifestyle increases

👉 Just go to our FIRE Calculator in the Calculator section 😉

⚠️ Risk	🧠 What it means
⏳ Longevity risk	Living longer than your money lasts
📉 Inflation risk	Money slowly losing its buying power
📊 Market risk	Investments falling in value temporarily
🏥 Healthcare risk	Medical bills draining your savings
📜 Policy risk	Government rules and tax laws changing

📌 Good planning = risk management, not wishful thinking.

🧠 (Explained for people who don’t know anything yet)

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🏦 EMPLOYEES’ PROVIDENT FUND (EPF)

🧠 What is EPF?
EPF is a retirement savings scheme for salaried employees in India.

Think of EPF as –
A forced piggy bank that your company makes you use — for your own good.

🧾 How EPF Works (Step-by-step) –
1. You get a job in a company
2. A part of your salary is cut every month (around 12%)
3. Your employer adds the same amount
4. This money goes into your EPF account
5. Government manages it and gives interest

📌 You cannot easily withdraw this money — which is good for retirement.

💸 Example –
• Your basic salary = ₹20,000
• You contribute ≈ ₹2,400
• Employer contributes ≈ ₹2,400
• Total monthly saving = ₹4,800
Over the years → BIG retirement amount.

🔐 Risk Level –
• Very low risk
• Stable returns
• Not market-dependent

👤 Who EPF is best for –
✔ Salaried employees
✔ People who don’t trust markets
✔ Those who want forced discipline

🧠 Vocabulary Box –
• Provident Fund → money saved for the future
• Contribution → money added regularly
• Interest → extra money earned on savings

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🪙 PUBLIC PROVIDENT FUND (PPF)

🧠 What is PPF?
PPF is a government-backed long-term savings scheme that anyone can open.

Think of PPF as –
A safe locker where you keep money for the long term.

🧾 How PPF Works –
• You open a PPF account (bank or post office)
• You put money whenever you want (up to a limit)
• Government pays interest
• Lock-in period = 15 years

📌 You don’t need a job to open a PPF account.

💸 Example –
• You invest ₹50,000 every year
• Interest keeps adding
• After 15 years → big, tax-free amount

🔐 Risk Level –
• Very low risk
• Government guaranteed

👤 Who PPF is best for –
✔ Students
✔ Self-employed individuals
✔ Conservative savers
✔ People who want zero tension

🧠 Vocabulary Box –
• Lock-in period → money can’t be fully withdrawn
• Tax-free → government doesn’t take a cut

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🧓 NATIONAL PENSION SYSTEM (NPS)

This one sounds scary, so let’s go slow 👽

🧠 What is NPS?
NPS is a government-supported retirement system where your money is invested in markets for long-term growth.

Think of NPS as –
A retirement-only mutual fund with pension rules.

🧾 How NPS Works –
1. You invest money regularly

2. Your money goes into –
• Equity (shares)
• Debt (bonds)

3. Money grows over time

4. At retirement –
• You withdraw part as a lump sum
• Remaining amount is used to buy annuity (monthly pension)

📌 Important Rule –
You cannot take out all the money at once.

This ensures –
• You don’t blow up your retirement money
• You get monthly income later

🧠 Vocabulary Explained –
• Market-linked → returns go up & down
• Annuity → monthly pension income
• Tier I → retirement account (locked)
• Tier II → flexible account (optional)

👤 Who NPS is best for –
✔ Long-term planners
✔ People who want pension income
✔ Those comfortable with markets (a little)

🧾 ATAL PENSION YOJANA (APY)

🧠 What is APY?
APY is a government pension scheme designed mainly for people working in the unorganised sector.

Think of APY as –
A fixed monthly pension promise by the government after you turn 60.

🧾 How APY Works –
• You join APY between ages 18–40
• You contribute a small amount every month
• Contribution depends on the pension you choose
• Government guarantees a fixed pension
• Pension starts after age 60

💸 Pension Options –
₹1,000 / ₹2,000 / ₹3,000 / ₹4,000 / ₹5,000 per month (after 60)

🔐 Risk Level –
• Very low risk
• Government guaranteed pension

👤 Who APY is best for –
✔ Workers without EPF
✔ Daily wage workers
✔ Small earners
✔ People who want guaranteed monthly income

🧠 Vocabulary Box –
• Pension = monthly money after retirement
• Unorganised sector = jobs without fixed salary or EPF

🚀 (The Growth Engine)

🧠 What is a Mutual Fund?
A mutual fund collects money from many people and invests it in –
• Shares
• Bonds
• Other assets

Think of it as –
A basket of investments managed by experts.

💡 Why Mutual Funds Matter for Retirement –
• Retirement planning is long-term
• Inflation slowly kills savings
• Mutual funds help money grow faster over time

🧠 SIP Explained –
SIP (Systematic Investment Plan) means investing small amounts regularly.

Think of SIP as –
EMI for your future.

📊 Types of Mutual Funds –

Equity Funds
Meaning: Invests in company shares
Use: Long-term growth

Debt Funds
Meaning: Invests in loans and bonds
Use: Stability and safety

Hybrid Funds
Meaning: Mix of equity and debt
Use: Balanced growth with lower risk

📌 Age-based Rule –
Young age → more equity for growth
Older age → more stability and debt

🧠 What is an Annuity?
An annuity is a monthly income plan provided by insurance companies.

How it works –
You –
• Give them a lump sum
• They give you monthly money for life

🧾 Types Explained –
• Immediate annuity → income starts now
• Deferred annuity → income starts later
• Joint life annuity → income continues for spouse

⚠ Why Annuities Are Tricky –
• Low returns compared to investments
• Very little flexibility
• Money gets locked for life

📌 Key Rule –
Use annuities for stability and guaranteed income, not for growth.

🏠 (Using Your House as Income)

🧠 What is a Reverse Mortgage?
A reverse mortgage is a loan where –
• Senior citizens use their house as security
• The bank pays them monthly income
• They continue living in the same house

🧾 Key Points –
• Ownership stays with the senior citizen
• No monthly repayment needed
• Repayment happens after death or house sale
• Useful when regular income is low

👤 Who It’s For –
✔ House owners
✔ People with no pension income
✔ Seniors who need monthly cash flow

🌐 Big Picture Summary –

EPF → Forced savings for salaried people
PPF → Safe long-term savings
NPS → Pension + retirement income
Mutual Funds → Long-term growth engine
Annuities → Guaranteed monthly income
Reverse Mortgage → Income from your own house

📜 (Making sure your money reaches the right people, smoothly)

🔍 What is Estate Planning?

Estate planning means –
Deciding who will get your money, property, and assets, and
how easily they will get it.

Your estate includes –
• Bank accounts
• Insurance money
• PF / PPF / NPS
• Mutual funds & investments
• Property (house, land)

📌 Even small amounts need planning.

🤔 Why is Estate Planning Important?

Estate planning –
• Prevents family confusion
• Avoids legal disputes
• Saves time, money, and stress
• Ensures your wishes are followed

📌 Without estate planning, the law decides — not you.

🛠 How to Do Estate Planning (Simple Steps)

🟢 Step 1 – List Everything You Own

Write down –
• Bank accounts
• Investments
• Insurance policies
• Property details

🟢 Step 2 – Add Nominees Everywhere

Nominee = person who receives money temporarily.

📌 Nomination helps quick transfer but does NOT decide ownership.

🟢 Step 3 – Write a Will

A Will clearly states –
• Who gets what
• In what proportion

📌 A simple written will is valid if it is properly signed.

🟢 Step 4 – Keep Documents Organised

Tell your family –
• Where important documents are kept
• Whom to contact when needed

🧠 Key Vocabulary (Very Important)

• Will → legal document saying who gets what
• Nominee → person who receives money first
• Heir → legal owner of assets
• Probate → court validation of a will

📌 Will decides ownership. Nominee helps transfer.

⚠️ (Most people ignore this… and their families suffer)

Estate planning sounds scary, but it’s actually one of the kindest things you can do for your family.

❌ Mistake 1 – “Estate planning is only for rich people” 💰

Why people think this –
• “I don’t own crores”
• “I’m too young”
• “This is only for businessmen”

Reality –
• Even ₹1 lakh, a bank account, or a house is an estate
• Confusion happens even with small amounts

📌 Estate = everything you own
(bank accounts, insurance, PF, property, investments)

❌ Mistake 2 – “Nomination is enough” 📝

What people think –
• “I added a nominee, job done”

Truth (very important) –
• Nominee ≠ Owner
• Nominee only receives the money, not legal ownership

📌 Will decides ownership.
Nominee only receives money on behalf of legal heirs.

❌ Mistake 3 – “I’ll think about this later” ⏳

Why this is dangerous –
• Death is unpredictable
• Accidents don’t check age
• No clarity → family fights and court cases

📌 Estate planning is not about death.
It’s about avoiding confusion and stress for your family.

🧠 Vocabulary Box –
• Will → written document saying who gets what
• Heir → legal family member
• Probate → court validation of a will

📌 Even a simple will written on paper is better than having no will at all.

🚑 (This one ruins most retirement plans)

❌ Mistake 1 – “I’m young, I don’t need health insurance” 🧑🎓

Why people think this –
• “I’m fit”
• “I don’t fall sick”
• “Company insurance is enough”

Reality –
• Illness doesn’t ask your age
• Accidents happen suddenly
• Employer insurance ends when you leave the job

📌 Health insurance is cheapest and easiest to get when you’re young.

❌ Mistake 2 – “I’ll buy insurance when I’m older” 🕰

Why this backfires –
• Premiums increase with age
• Diseases may already exist
• Some illnesses may not be covered

🧠 Vocabulary Box –
• Pre-existing disease → illness you already have
• Waiting period → time before insurance starts covering it

📌 Buying early = fewer restrictions + lower cost.

❌ Mistake 3 – “Insurance is investment” 💸

Big misunderstanding –
• Insurance is NOT for making money
• Insurance is for protecting your savings

📌 Health insurance protects your retirement fund from hospital bills.

💸 (Taxes can quietly eat your retirement money)

❌ Mistake 1 – “I’ll worry about tax later” 😬

Why people think this –
• “Tax is a future problem”
• “My CA will handle it”

Reality –
• Bad tax planning = lower real returns
• Wrong withdrawals = higher tax outgo

📌 Retirement planning without tax planning is incomplete.

❌ Mistake 2 – “Tax saving = tax planning” 🧮

Big confusion –
• Buying random products in March just to save tax
• No long-term thinking or exit planning

📌 Tax saving ≠ Tax planning

❌ Mistake 3 – “All retirement money is tax-free” ❌

Truth –
• Some withdrawals are taxable
• Some pensions are taxable
• Tax rules differ by product

🧠 Vocabulary Box –
• Exemption → income that is not taxed
• Deduction → reduces taxable income

⏳ “I’LL START LATER”
What you think – I’ll earn more later
Reality – Time > money
👉 Start small. Start now.

🏦 “FD IS ENOUGH”
What you think – It’s safe
Reality – Inflation reduces value
👉 Safety + growth works better.

🎲 “MARKET = GAMBLING”
What you think – Too risky
Reality – Long-term investing ≠ betting
👉 Growth needs patience.

🏥 “I DON’T NEED HEALTH INSURANCE”
What you think – I’m young
Reality – One hospital bill can wipe savings
👉 Insurance protects your future money.

💸 “INSURANCE = INVESTMENT”
What you think – Returns guaranteed
Reality – Insurance = protection, not growth
👉 Different goals. Different tools.

🧺 “ONE APP, ONE PLAN”
What you think – Easy & simple
Reality – One basket = big risk
👉 Diversify smartly.

👪 “PARENTS’ PLAN WILL WORK”
What you think – They did fine
Reality – Different India, different costs
👉 Learn from them, don’t copy blindly.

📝 “I’M TOO YOUNG FOR A WILL”
What you think – Not needed
Reality – Nominee ≠ owner
👉 Clarity avoids confusion.

🧾 “I’LL THINK ABOUT TAX LATER”
What you think – Future problem
Reality – Bad planning = less money
👉 What you keep matters.

🔁 “PLAN ONCE, DONE”
What you think – Set for life
Reality – Life changes
👉 Review your plan once a year.

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🛠 Interactive Tools to Embed –
• 🔢 FIRE Calculator
• 📉 Inflation Simulator

FINAL LINE
You don’t plan retirement because you’re old.
You plan retirement because you want freedom.