Prospect: I will require less money after I retire.
Me: Tell me which expense will go down, please? Groceries, Medical, Travel,…????

P: Ok then, How much will I require?
Me: There are no simple formulae

P: Tell me some simple ways to calculate.
Me: Your age is 48 now, and your monthly expenses are?

P: About Rs.70,000.
Me: Does this include any EMIs?

P: Yes, My Renault Duster car EMI of Rs 10,000
Me: so, Can I assume that Rs.60,000 will happen even in retirement?
P: Yes.

Me: At retirement (60years) your expenses will be Rs. 150,000 per month adjusted to Inflation. This does not include Vacation trips, high-value transactions.

Me. May I assume that your ANNUAL EXPENSES at retirement will be about Rs. 18 lakhs? (150,000*12 = 18lacs)
P: Yes. Sure.

Me: You will live for about 30 years of post-retirement?
P: I will retire at 60 and die at 70
Me: How sure of 70?

P: I hope to die at 70.
Me: What if you live like your Dad/Mom or Grand Parents…?

P: well what then?
Me: you will require 30*18 lakhs.

P: Oh My God, That’s too much!!
Me: No. That is Rs. 4.5 crores nearly (Adjusted to Inflation)

P: This is totally scrap, My father did not need that much and you are bluffing.
Me: Your dad had very little expenses, no branded clothes, no vacations, no branded shoes, no cars,….no eating out.

P: Yes, But I can afford it.
Me: You can afford it because you are NOT PAYING YOURSELF FIRST.

P: What does that mean?