New Delhi: Retirement planning is an important aspect of an individual’s work life. Just like health emergencies and death, growing old is a reality of our lives which must be planned for. Growing old is not a stigma. It requires planning since old age may be accompanied by retirement or a slowing of reflexes, requiring individuals to fall back on a built corpus.
What is 30X retirement rule
Retirement rule of 30X mandates that an individual should have a corpus that is 30 times their current annual expenses before retirement.
Let’s say that your annual expenses are Rs 10 lakh, 30X of that amount will add up to Rs 3 crore. This is the amount that you will need to accumulate before retirement to live-tension-free.
What is 4% withdrawal in 30X rule
If you have a 30X corpus, it should be ample to withstand an annual withdrawal of up to 4 per cent.
For example, if you have a Rs 3 crore retirement corpus, then 4 per cent per annum will amount to Rs 12 lakh.
This is the amount you need to cover your expenses without taking a hit to your savings.
Factors to keep in mind while planning for 30X rule
Individuals must ensure that they keep the following factors in mind while planning their retirement expenses:
Inflation
Life expectancy
Volatility in markets
Changes in lifestyle
It is important to diversify your portfolio in order to ensure maximum return on your savings. A combination of equity, debt, bank deposits, and government schemes can help investors accumulate a sizeable corpus for their retirement. Individuals will do well to consult a financial advisor for better retirement planning.
Retirement planning can be simplified with the 30X rule of financial planning. Read on to know more about how to create a sizeable retirement corpus. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
