To acheive a retirement corpus of Ten crores, a family with single earning member vs the family with both working members, Does it really matter ?? Only the power of compounding matters.
If some one asks me how much money is needed for retirement in India, though i say it depends on your life style, expenses and other commitments, but if i am still forced to provide a number.
I will say go for a networth of Ten crores (Dont include the assets that you might inherit).
Once i say Ten crores people will defend saying for two people working it might be easier and if its a single earning then i have to work life long etc. This is just a mindset and they really underestimate the power of compounding which i have to explain to make them understand. May be we have been taught poorly the power of compouding.
Let us assume both husband and wife are working and they are able to save 11750 each.
Investment per month - 11750
Annual returns - 12%
Investment step up annually 10%
Investment Tenure - 25 years
After 25 years both husband and wife will accumulate 5 crores each so that the networth becomes ten crores.
Let us assume only one works and he or she is able to save 11750 each
Investment per month - 11750
Annual returns - 12%
Investment step up annually 10%
Investment Tenure - 30 years
After 30 years the accumulated corpus would be Ten crores.
So when one member works to achieve ten crores corpus it takes 30 years and when both works it takes 25 years(both working for 25 years) to acheive the same corpus for the same investment amount and step up %.
Both working for 25 years and one person working for 30 years, has pros and cons and i leave it to individual. But the point here is the power of compouding that works beautifully and acheiving 10 crore corpus whether single working or both working does not matter much as far as you are a disciplined investor allowing your money to grow....
In a later post let us see how the 10crore networth can be deployed...
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