When should you retire ?

Simple and straight answer is when you are prepare for it mentally and financially.

But if that is the answer, Why I am writing the blogpost on it? and the answer is not helping out anything. There is more to see than what you are watching with your eyes. I am going to write it here in detail.

 I googled it, I found so many good views on it. Many writers are talking about selling house at retirement, some of them are talking about asset allocation on retirement day. That time I realise that this topic is very large. Why? Because when I was thinking that US citizens are aware and educated about complications in retirement, then I found this…

Shocking? But more shocking is this…

There is something more to shock

and then the reality in India is this on basis of one twitter poll


So, Why I , Ashutosh Tilak ,in my mid 20’s, Being Millennial, writing this?

Reason is Retirement planing is not the thing which you start planing at 40’s.

Retirement is concept which assume that after certain age, your body is not the same which it was some years before. So you need to stop working and take care of your health. At what age this will takes place is very important factor to give the answer from where we started. Medical studies proved that age between 55 to 64, our body start showing sign of some chronic illness, as per study conducted worldwide by Center for Disease Control and Prevention with Medical Association. So that is right age for retirement.

But that is not all. There are many factors affecting your decision. In fact its not right way to decide. In my generation many want to retire early. so? I talked with many and they told me that they want to give time to their spouse and children, which is completely acceptable. If you are salaried person, then its very large change for you as your finance will drastically change. Not only finance, But what about the time which you are now free? That is also one point.

First factor is as usual, your finance. For retirement, you need to keep your investments good. Because now you don’t have salary but still you need money. How are you going to earn it? If you was planing it from your young age, its great. But is it good enough for taking care about your all expenses even after taking inflation into account? Rule of thumb is withdraw 4% of your portfolio or 15 times your annual withdrawal amount. also take into account that you will survive more than average expected life of common man in your country. Development in medical area males it difficult for people to calculate expected life. It is supposed to cover your monthly expenditure. How you are going to make it asset allocation? up to you and here you need help from professional.

Second, answer the question like what I want to do after retirement? if your concept for retirement is only to escape Job then please forget about it.

One another point for thinking before retirement is DON’T RETIRE IN BEAR MARKET. This will definitely harm to your finance. If your health permits then please for sake of god, work little more. I am talking about it as many of your retirement investments are in equity markets.

In short retire with a plan about what you will do in the time after your retirement and retire only when your financial expectations are in order and you practice to live in between the same budget. Why?

Now what about other things like home?

Recently I was reading one article about selling your home on retirement. why? I mean I cant understand why you supposed to sell your house? yes you can rent house but will that be possible for you to shift every time you supposed to? after certain age it will be difficult. So as per my view is no. Do not sell your home in fact buy one as early as possible and here I am ready for debate with one group who is saying buying house is waste of money. There are some advantage for rent but with health issue do you want to take this extra work load. so in fact I want to make one more item in the checklist and that is DO YOU HAVE YOUR OWN HOUSE?

Going to end this post by Highlighting that the quality of your expenditure before retirement and after retirement are two different things. Many things will change in between that. Are you ready for all that changes? If your answer is YES only then think about retirement.

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter