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Introduction
Retirement planning can feel overwhelming, especially when financial planners throw around big, scary numbers like “You’ll need 5 million rupees in 20 years to maintain your current lifestyle.” This can make you feel anxious. However, many of these projections are often exaggerated to pressure you into making decisions that may not suit your needs.
In this post, I’ll explain why traditional retirement planning is often misleading and show you a simple, stress-free way to plan for retirement.
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The Retirement Planning “Scam”
I’m not saying all financial planners are bad, but many paint a gloomy picture of your financial future to make you worry. This fear often leads people to sacrifice their present happiness for a future that may not turn out as expected.
Why do I call this a scam? Many retirement projections are based on overly cautious or unrealistic assumptions. While saving and investing are important, do you really want to sacrifice the best years of your life for a retirement you may not fully enjoy?
Instead of stressing over every rupee, let’s look at a more balanced approach that allows you to enjoy today while preparing for tomorrow.
Why Traditional Retirement Planning Is Misleading
Here are five reasons why traditional retirement planning is overrated and how you can take a more relaxed, practical approach:
1. Today’s Generation Is Wealthier Than the Last
We are generally wealthier than the previous generation, partly because we benefit from what our parents built, like property. For example, if your parents already own a house, you have a big financial advantage.
Why? A significant part of your income probably goes towards paying rent or a home loan. But if your family owns property, you may not need to buy a house immediately. You could live in your parents’ home or sell it if you inherit it, reducing your financial burden for retirement.
Previous generations spent their entire lives paying off home loans. Without that burden, your financial needs for retirement will be much lower.
2. People Are Healthier and Can Work Longer
People today are healthier and living longer. At 60, many of us will still be active and able to work part-time or start a second career. This is a huge benefit because it means you can keep earning money even after retiring from your main job.
Many people I know planned for a leisurely retirement but quickly got bored. Working, even part-time, can keep you engaged and reduce financial pressure during retirement.
Let’s face it, many of us enjoy the routine and purpose that work brings. It’s not just about money; it’s about staying relevant, productive, and mentally sharp.
3. Some Expenses Disappear After 60
By the time you’re 60, many expenses you have today will go away. For example, you’ll likely have paid off your home loan, and you won’t need life insurance or financial support for children anymore.
Even your lifestyle costs will likely decrease. You may not travel or eat out as much as you did in your 30s and 40s. Financial planners often assume you’ll continue with these expensive habits, but that’s usually not the case.
With fewer expenses, you’ll need far less money in retirement than traditional plans suggest.
4. Inflation May Cool Down
Traditional retirement plans assume inflation will remain high forever. While inflation might be 6-8% today, it’s likely to decrease as the country becomes more developed.
By the time you’re 60, inflation could drop to 2-4%, so future costs won’t rise as much as some projections suggest. Financial planners often overlook this, leading to overestimated savings targets.
5. Financial Planners Overcomplicate Things
Most people don’t realize this, but financial planners tend to make things more complicated than necessary. They’ll recommend creating separate portfolios for every life event: retirement, child education, vacations, and more. Before long, you’re managing multiple accounts with fees and complexities.
But this approach is unnecessary and even counterproductive for most people. Retirement planning doesn’t have to be so complicated, and you don’t need to give up today’s enjoyment for a far-off future.
How to Simplify Your Retirement Planning
Now that we’ve discussed why traditional retirement planning can be misleading, let’s look at ways to simplify it.
1. Invest in 3-4 Good Mutual Funds
You don’t need multiple portfolios for every goal in life. Instead, focus on 3-4 high-quality mutual funds that have performed well over the last 3 to 5 years. Avoid chasing short-term trends—focus on funds with a strong long-term record.
Once you pick reliable mutual funds, set up a SIP (Systematic Investment Plan) to invest regularly. SIPs automate your investment process, making retirement planning stress-free. It’s a “set it and forget it” strategy that works.
2. Explore Small Case for Additional Investments
If you have extra money after contributing to mutual funds, consider Small case. Small case offers curated portfolios based on themes or sectors, making it easy to invest in specific stocks. I’ve personally invested in Small case and seen great returns over the years.
However, always do your research and consult a financial advisor before investing. While I’ve had success, all investments come with some risk.
3. Focus on Skills, Not Just Money
Retirement planning isn’t just about how much money you save. It’s also about developing skills that keep you active and relevant.
By the time you’re 50, start positioning yourself as an expert in your field. You don’t have to fully retire at 60—use your skills to take on freelance work, consult, or even start a business. Staying engaged keeps you sharp and reduces the need to rely on your savings.
Conclusion
The key to a happy retirement isn’t sacrificing your present for the future. It’s about balance—save wisely, invest in good opportunities, and keep developing your skills so you can stay active and relevant even after leaving your full-time job.
Retirement planning doesn’t need to be complicated. Focus on a few solid mutual funds, explore platforms like Small Case for diversification, and most importantly, invest in yourself.
By simplifying your approach, you can enjoy life today while ensuring a comfortable tomorrow.