How people react to a retirement planning calculation

Published: June 1, 2015 at 3:13 pm

Here is how people react when they use a retirement calculator for the first time.


Most online calculators do not allow you to increase the investment amount each year. So I made one for myself and punched in the numbers. The results scared the living daylights out of me. I sent the sheet to Subra and asked him if my assumptions (inputs) were reasonable. He said they were.

That meant I had to invest each month as much as the calculator said I should. Fear is a great motivator for me. Initially, I could not invest as much, but after a year or two I could overtake my investment schedule.

I invest out of fear.  I do not want to depend on others financially when I retire. If I require physical help from others, I better have enough money. It is stupid to expect emotional support. That boils down to luck.

Disbelief: Something is wrong. It can’t be true!

Many react this way.  They blame the mathematics and search for a calculator which neglects inflation after retirement. They decrease inflation, increase returns, assume expenses will be much lower in retirement. Anything to get a nice and friendly “monthly investment required”.


Few have lost sleep after using my calculators. Often for days.  Typically these are people close to, or in theirs 40s. Late wake-up calls can be traumatic. There is only one thing to do: invest like our ass is on fire.

Fear of Inflation is a sales conspiracy!

Yes, you read that right. There are many who believe that inflation is nothing to worry about and insurers and AMCs use that to sell products out of fear.

I am willing to believe that the moon landings were faked, but to say that inflation is not a concern when prices double every few years is dumb.


My parents generation did well with a pension. So can I.

That is a fallacy. Our parents generation or the one before that did not have pension that was enough to combat inflation. They ‘managed’ by quietly and gradually adapting: changing their lifestyle, reducing expenses etc.

They also lived in a joint family and had multiple children who gave them a bit chunk of their salaries to handle the household’s expenses. While they must have felt the pinch personally, it gave us the impression that everything was fine.


It is obvious that times have changed and if a constant pension is all that we are going to get, we better pray a swift and speedy death.



Take your retirement seriously. I would suggest that one should invest each month as much as they spend, but that would be dismissed as impractical.

So let me try this: For every year in employment try to accumulate one year of financial independence ( ability to generate inflation-protected income)


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