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What is A Good Retirement Income?

Published On Aug 16, 2021 5:00 PM By InsuranceDekho

One of the most important questions to answer as you make long-term financial goals is: What is a good monthly retirement income? The answer can have a straight and direct impact on your retirement and savings plan. According to researchers and surveys, the average common 65-plus household spends 6 to 7 lakhs per year, or about INR 50,000 per month in India. However, because no two people are identical, determining how much money you'll need on a monthly basis will be determined by your lifestyle, ambitions, and unique retirement vision. 

What is A Good Retirement Income?

As mentioned already, no one can state an amount that can be termed as a good retirement income since the requirement for money depends on many factors. Someone having a minimal lifestyle might do with INR 25,000 also while a family living a luxurious life might need INR 2,50,00. So it depends on a lot of internal-external factors. However, when you are estimating the income you would need to live adequately, keep the following things in mind:

  • Plan Your Post Retirement Finances

It can be beneficial to work backwards while planning for your ideal retirement. How do you see yourself spending this period of your life? Do you want to downsize and move to a beachfront condo, or do you want to spend your time travelling? Taking the time to think about how you want to live once you leave employment will provide you with an excellent starting point for estimating your spending and creating a plan to get there.

  • Estimate The Required Corpus

The 4 percent guideline is one method for estimating your monthly spending in retirement. The rule recommends withdrawing no more than 4% of your retirement assets during the first year of retirement. Then, in succeeding years, you can withdraw the same amount, plus a little extra to account for inflation. The 4 percent rule, of course, has its limitations. For example, it is based on a portfolio that is evenly split between equities and bonds. Consulting with an expert financial advisor is an excellent method to create an individualized retirement income plan that is tailored to your specific circumstances.

  • Keep The Financial Risks In Mind

After determining how much income you would require in retirement, the next stage is to determine how to arrange your assets. Creating a retirement plan to help you live longer will help you feel more sure that your savings will meet your requirements and desires in your post-working years. You'll need to keep an eye on how market volatility and inflation affect your nest egg and make adjustments as necessary. Then there are the taxes.

  • Have A Robust Retirement Policy

Living comfortably in retirement typically entails having a range of income streams to draw on, such as consistent monthly income from Social Security, pensions, and annuities. If at all possible, attempt to pay all of your critical expenses with assured revenue from these sources. Insurance plans are effective retirement-saving vehicles that allow you to accumulate assets with pre-tax contributions. This reduces your taxable income while you are working. These accounts can be used in conjunction with one another.

Take Away

Another thing to think about while planning your retirement income is the legacy you wish to leave. Working with a financial advisor can help you design a strategy that maximizes your income while also accounting for the assets you want to leave to your heirs. So, while there isn't one answer to the question "what is a healthy retirement income?" Working with a qualified financial advisor can help you chart a clear path for achieving your personal retirement goals.

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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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