One of the most important decisions a person has to take is when to retire, says Madhu Sinha in Retirement Planning: A guide for financial planners ( ).

While some say that one should retire when he or she can afford to, there may be others who feel that even if they have accumulated enough for a comfortable retirement, they would love to work till they are healthy; yet others may be of the view that they should retire at their superannuation age defined by the employer.

Painting such diverse views, the author acknowledges that most people look forward to the day when they can trade the 9-to-5 grind for a little bit of well-deserved rest and relaxation. She, however, cautions against tapping the savings during a down period, because the investor may then run the risk of eating into years of valuable retirement income, which he may never be able to regain.

“This is particularly important now since there is a lot of uncertainty in the market.”

A sobering analysis presented in a section titled ‘inadequate savings' is about a 40-year-old who requires Rs 20,000 a month to lead a reasonably comfortable life. Taking into account the current cost of living, on retirement, 20 years later, the same would translate to Rs 53,065 a month at an inflation rate of 5 per cent, Sinha computes. “To sustain this monthly income until he is 80 years old, he would have to target a corpus of Rs 10.5 lakh at the start of age 60, and it should earn a return of 2 per cent after adjusting for inflation.”

Check, therefore, if you are saving enough for your retirement!

Suggested study, in the interest of a long and comfortable retired life.