What is the Retirement Corpus? Learn Why & How it is Important

As we enter our 20s, we start to build a better career for ourselves to live comfortably for the rest of our life. After 30–35 years of age, we must start to build an emergency fund and retirement planning. It is necessary to live life peacefully after retirement. For that we must consider the retirement corpus. Let’s learn about this concept and understand how and why it is important.

What is the Retirement Corpus? 

The sum of all your savings and investments made throughout your working life to support your lifestyle, cover living expenses, medical, travel and maintain financial independence after you stop earning a regular income is known as a retirement corpus.

Why is it necessary?

Your devoted money, which is vital for covering your daily necessities, health care and inflation, is your only source of support when you are unemployed after retirement.

Having a retirement corpus gives you financial freedom. Also, most importantly, it gives you peace of mind and independence. Let’s learn about the retirement corpus amount required for the retirement period in India.

In India, the necessary retirement corpus is highly dependent on your personal lifestyle, expenditures, inflation rate and the length of your retirement. Generally speaking, financial professionals advise targeting a corpus that is 25 to 30 times your annual expenditures at the time of your retirement.

The most important elements of a retirement fund are:

• It depends on your present age, anticipated retirement age, lifestyle objectives, potential costs, inflation rates and life expectancy.
• Needs a withdrawal plan, such as Systematic Withdrawal Plans (SWPs), to make sure the money lasts and increases.
• To achieve financial independence and a preferred lifestyle without depending on a wage.
• It consists of investments such as stocks, bonds, mutual funds and retirement plans.

(Disclaimer: Given the input is on an information basis, please seek professional advice.)