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How Much Bank Balance Should You Have on the Day of Your Retirement

Your ideal bank balance will allow you to live a life of independence and all the amenities you need, which you deserve because you have given up your entire earning life for your family and for others. You deserve a few decades of peace and plenty.

But what IS the ideal sum you must have accumulated by the time you hang up your boots from professional life so that you can have a peaceful retired life?

Your ideal bank balance on the day you retire depends on your current age and annual income. The following stats have been derived by financial experts. Choose the right category for yourself and then read on:

If Your Annual Salary Is between 5 – 7 Lakhs

And current age is between 30 and 33 – Your ideal retirement bank balance is around Rs 1.2 crores

And current age is between 34 and 36 – Your ideal retirement bank balance is around Rs 1 crore

And current age is between 37 and 39 – Your ideal retirement bank balance is around Rs 80 lakhs

And current age is between 40 and 43 – Your ideal retirement bank balance is around Rs 70 lakhs

And current age is between 44 and 46 – Your ideal retirement bank balance is around Rs 55 lakhs

And current age is between 47 and 50 – Your ideal retirement bank balance is around Rs 40 lakhs

If Your Annual Salary Is between 8 – 10 Lakhs

And current age is between 30 and 33 – Your ideal retirement bank balance is around Rs 1.7 crores

And current age is between 34 and 36 – Your ideal retirement bank balance is around Rs 1.5 crores

And current age is between 37 and 39 – Your ideal retirement bank balance is around Rs 1.2 crores

And current age is between 40 and 43 – Your ideal retirement bank balance is around Rs 1 crore

And current age is between 44 and 46 – Your ideal retirement bank balance is around Rs 85 lakhs

And current age is between 47 and 50 – Your ideal retirement bank balance is around Rs 65 lakhs

If Your Annual Salary Is between 11 – 13 Lakhs

And current age is between 30 and 33 – Your ideal retirement bank balance is around Rs 2.2 crores

And current age is between 34 and 36 – Your ideal retirement bank balance is around Rs 1.9 crores

And current age is between 37 and 39 – Your ideal retirement bank balance is around Rs 1.6 crores

And current age is between 40 and 43 – Your ideal retirement bank balance is around Rs 1.2 crores

And current age is between 44 and 46 – Your ideal retirement bank balance is around Rs 1 crore

And current age is between 47 and 50 – Your ideal retirement bank balance is around Rs 80 lakhs

To know the logic behind these statistics, read here.

You now know how much your bank balance should be on the day of your retirement. Let’s now look at how to get there with small, affordable monthly investments that not only build a large corpus for your retirement but also help you save tax.

Why Is a Pension/Retirement Plan an Absolute Must in Your Portfolio

Investing in retirement plans is one of the most crucial decisions of your working life. Here’s why.

Continuity

Investments in gold, FDs, and mutual funds can be discontinued without a penalty. Due to this feature, it is very easy for people who have a financial crunch to either stop funding these investment tools or break into them. Contrarily, due to the unavailability of a discontinuing feature in retirement savings plans (without penalties), the habit of saving continues and you are invested for the entire duration agreed upon between the insurer and yourself. In a way, retirement plans do not allow you to move your eyes away from the larger goal.

Small Savings Turn into a Large Corpus

Mr. X invests Rs 6,000 in a retirement investment plan for 30 years. He receives a pay-out of Rs 90 lakhs (8% RoI). Presuming Mr. X earns close to Rs 40,000 per month, this is a mere 15% or so of his take-home salary. Also, his salary is only going to increase here on out, and the premium isn’t.

Note that if Mr. X begins investing at an even earlier age with smaller amounts, he will receive even higher pay-outs.

Flexibility of Three Retiral Benefit Options

With pension/retirement plans these days, you have three options to choose from as far as pay-outs are concerned:

  • Lump sum retiral benefits
  • Monthly pension
  • Combination of both

In Conclusion

Retirement plans ensure you have enough wealth for your retired life. These plans will allow you to travel the world with your spouse, buy gifts for your grandchildren, and engage in all those activities that you could not do due to your professional commitments. This is why retirement plans are a crucial aspect of the mature urban Indian’s financial portfolio. Needless to mention, retirement plans being insurance products, they provide the following additional benefits:

  • Tax benefits on premiums paid under Section 80(C)
  • Significant death cover that is paid to your family in case you meet an untimely demise; this sum ensures your family's dreams and aspirations are not put on hold and they continue with the same lifestyle

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