Money Wise: Aam Aadmi's Guide to Wealth and Financial Freedom

by Sharath Komarraju

Multiply the annual expenditure figure that you wrote down and multiply it with the number of years of expected retirement. This final number will be the total amount of money that you will need to accumulate for your retirement. Note that since we haven’t taken inflation into account, you should increase the sum by the inflation amount every year. So if you calculate your target retirement corpus as two crore today, you should remember to increase it by the inflation number every year from now. So next year around this time, your target will be 2.2 crore (assuming 10 per cent inflation), then in the year following that, it will be 2.42 crore, and so on. The Government of India publishes its CPI (Consumer Price Index) every quarter, so you can use that number to correct your target every quarter as well.