Retiring with Rs. 2 crore: How much money you’ll have in your monthly budget-| North Loop Official Blog
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08 Dec 2020

Retiring with Rs. 2 crore: How much money you’ll have in your monthly budget-

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While a normal person spends a good 30-40 years in their career paths, retirement may come as a boon and a bane.

While it is a boon as people can finally settle down and enjoy retirement, it is also a bane as one has to worry about their finances.

Retirement savings is not something you start while in your 40s but is in fact an essential part of one’s career that needs to be done from the very beginning of one’s career.

Research concludes that the earlier a person starts saving money, the better off he is during retirement thanks to the power of compounding interest.

Savings help provide one a stress-free retirement, knowing that essential expenses such as healthcare and utilities are taken care of.

Retirement savings also help individuals realize their dreams of traveling the world.

The 50-15-5 savings rule-

A lot of financial advisors recommend a retirement savings plan that goes by a “50-15-5 rule”, attributing 50% towards essential expenses like rent and utilities, 15% towards retirement savings plan, and 5% towards a short term emergency fund.

These short-term emergency fund savings can be used to meet small expenses like vehicle maintenance, a birthday celebration, etc.

Exploring investment options pertaining to the amount set aside for retirement can not only help keep it secure but can also help build the same.

Get a zero-balance, no-fee NRE/NRO account with North Loop in 5 minutes

How much would you have to save to achieve a Rs. 2 crore retirement corpus-

Here is a sample monthly budget of a middle-class household of Rs. 50,000.

Monthly Budget (Rs. 50,000)
Type of ExpensesAmount (Rs.)
Rent20,000
Household Expenses10,000
Health Care2,500
Travel5,000
Misc Expenses12,500


Note that this table does not consider any ongoing EMI’s and other expenses such as child’s education expenses, etc.

Now with a monthly expenditure of Rs. 50,000, this is how much you would have to invest across various ages to hit a retirement corpus of Rs. 2 crore.

Retirement corpus (Rs. 2 crores)
Current Age (Years)Retirement Age (Years)Years to retire (Years)Average Life Expectency (Years)Safe Monthly Investments such as FDs at 7% return (in Rs.)Aggressive Monthly Investments such as Mutual Funds at 12% return (in Rs.)
25603570 years11,856.443,717.01
30603070 years17,385.886,661.82
40602070 years39,809.8622,173.74
50601070 years1,17,469.2190,538.94


The type of investments can vary depending on the risk appetite of the investor. Investors can choose from either safe investment instruments such as fixed deposits that can earn up to a 7% interest rate. On the other hand, relatively risky investment instruments such as mutual funds and stocks can provide up to 12% return on investments.

These figures sound promising and can help one sustain for a minimum of 20 years, however, the big question is- how does one manage to save up Rs. 2 crores?

Saving Rs. 2 crores is not an easy task and would require one to follow these habits to save better for retirement-

Try to maximize retirement contribution from your employer’s end into your retirement savings account and match the same amount of contribution on your end.

Increase your retirement savings contribution as and when your income increases.

Save a small portion of your money for emergencies as well, cover between three to six months' worth of your essential expenses.

Invest a part of your retirement savings into tax-saving instruments such as Equity-Linked Savings Scheme (ELSS) or any diversified portfolio to ensure less exposure to risks and maximum returns.

Retiring with Rs. 2 crore: How much money you’ll have in your monthly budget-

Extensive research has shown that an amount summing up to Rs. 2 crore should suffice for retirement and in this article, we uncover how much money you’ll have in your monthly budget when you retire with Rs. 2 crores.

Experts recommend individuals post-retirement to take out 5% as annual expenses, which account up to Rs. 10 Lakhs per year and Rs. 83,333 per month.

Now the withdrawal rate can vary based on various factors and we’re keeping 5% as the average withdrawal rate with the underlying assumptions that you have a well-balanced portfolio focusing more on bonds and cash type instruments.

However, these numbers do not take into account any sort of taxes, fees, or additional bonuses and the amount available for withdrawal can vary from case to case.

In case the withdrawal percentage falls to 4%, the annual amount sums up to Rs. 8 Lakhs, meaning that amount of Rs. 66,666 can be allocated towards monthly expenses.

In the case of a 3% withdrawal rate, the annual budget would sum up to Rs. 6 Lakhs, meaning that an amount of Rs. 50,000 can be allocated towards monthly expenses.

In the worst-case scenario, a two percent annual amount would sum up to Rs. 4 Lakhs, meaning that an amount of Rs. 33,333 would be available for monthly expenses.

Here are also six habits that can help you grow your retirement savings-

  • Start off with a proper retirement plan, clearly define your savings goals, and a feasible path to achieve them.

  • Start saving like a supersaver and try to put away 15% or more of your savings towards retirement. Remember- the earlier you start saving, the better thanks to the power of compounding interest.

  • Diversification of portfolio- diversification of portfolio into stocks, bonds, etc to ensure the spread of risks and maximization of returns over a stipulated period of time.

  • Trust your knowledge and instincts and stick with your investment portfolio despite market fluctuations. Investors that tend to hold on to their investments tend to benefit more than the ones that hit the exit.

  • Take low-risk investments that offer good value into consideration. Some of these investment instruments tend to outperform high risk stocks over time.

  • Make investments into tax-saving instruments.

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.