Avoid overspending, financial mistakes in early years of retirement

Persistent high inflation in developing countries, including India, confuses people and makes them spend much more than they should during retirement

High inflation, even if it is predictable, devastates the retirement of people who do not study personal finance in detail. I have previously written that the post-tax returns on our entire corpus over our lifetime will likely be in the ballpark of inflation. Also, a 60-year-old (let’s call her ‘X’) should plan that her corpus lasts roughly till the age of 90, i.e., for 30 years. Hence, she can spend one-thirtieth (i.e. 3.3 per cent) of her corpus in her first year of retirement.

 

Persistent high inflation in developing countries, including India, confuses people and makes them spend much more