If you want to maintain the same lifestyle which comes from earning 12,500 rupees a mnth(in today's rate), you would need approximately:
1) 59,000+ rupees approx. a month 24 years from hereon to maintain that same lifestyle as 12.5K fetches you right now, assuming inflation rate(on the safe side) to be 7%.
3) Your current 12.5K a month would be worth only around Rs. 3,900 a month 24 years from here on, assuming even 5% inflation.
Now, assuming you do indeed get 100 lac rupees at the age of 51, so let's see what happens after that, assuming you have a pretty healthy life and live till 90, that 39 years after that.
1) We assume first that your corpus would earn you 10% return even on that 120 lac till age 90, that is for a whole 39 years.
2) We would assume inflation at 7% as usual.
By my calculations, between 51 and 71 yrs. of age, you would do fine BUT your whole corpus of money would be over, even if it earning 10% rate of interest afte 71 years of age. You would in zero cash and go into the negative. At that old age, where will you turn to with nothing left!!
The main problem that I feel here is this: 100 lacs seems a lot to you, but its actual value over 24 years would reduce to approximately 30-32 lacs rupees worth in today's rate, considering an inflation of even 5%. 30-32 lac rupees is only good enuff to get a 3-bedroom flat n today's rate and you need to maintain a lifestyle as as today for 39 years between 51 and 90!!!!
YOUR CURRENT EXPENSE...If it is 12,500 rupees a month in today's rupees, the path currently needs to be fine-tuned as per me. You need an a super-aggressive(high-risk high-reward) portfolio and find means to get more cash to put into equity. Your savings are not worth keeping in savings. If you have property etc., then at old age you can also go into: "Reverse Mortgage".
Let others provide their detailed views and let's see what can be done. Nothing is impossible!
Edited by omshivaya - 22/Apr/2007 at 12:18pm
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