Swaminathan Jayaraman, a 27-year-old IT professional, has set himself a lofty target. He aims to retire with his father in the next seven years, and then sometimes augment his income with part-time work.
Jayaraman anticipates that he would need to save Rs 1.3 crore by 2026 to be able to quit his job and go globetrotting with his father.
While Jayaraman's target of effectively retiring at the age of 34 is optimistic, he would have to save enough to support his expenses, possibly for another 46 years, according to certified financial planner Kartik Jhaveri.
His current monthly income of Rs 1.5 lakh is more than sufficient to support his monthly expenses of Rs 80,000, which includes an equated monthly instalment of Rs 40,000 toward a home loan. But, if Jayaraman decides to start a family, depending on the number of children he has, his expenses would rise dramatically.
Jhaveri estimates that Jayaraman would need at least Rs 5 crore to safely stop earning a regular salary after seven years. If he has children, the amount required would rise to Rs 6 crore.
Having said that, Jhaveri, who's also director at Transcend Consulting, said Jayaraman's goal is a worthy one. Aiming high ensures that Jayaraman will have a substantial amount of savings under his belt. If Jayaraman doubles his current monthly investments, he may comfortably reach his own target, Jhaveri said. Then, at 34, he will be able to pause and reorient, and if required, work for another few years to achieve true financial independence.
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