Do you want financial freedom? Find your number first
Financial freedom means your investments can pay your expenses for life. Here's how to work out that number.
Financial freedom isn't a feeling, it's a number: the amount of money that can pay your expenses for the rest of your life, rising with inflation, without you having to work.
How to work it out
- Today's monthly expenses, without EMIs that will end before you stop working.
- Inflate them to the year you want freedom.
- Work out the corpus that can pay those expenses every month, rising with inflation, until the age you plan for, while the rest stays invested.
An example
Age 35, monthly expenses of ₹50,000, freedom at 60, planning until 85, with 6% inflation and 7% returns after retirement:
- Expenses at 60: about ₹2.15 lakh a month.
- Freedom number: about ₹5.6 crore.
- SIP needed from today at 11% a year: about ₹35,100 a month. A step-up SIP reduces the starting amount.
Your number
This is a planning estimate. A SEBI-registered investment adviser can build a plan for your situation.
This article is general information, not personal financial advice. Rules and rates change; check the latest before you act.