Often we think that if somehow ₹ 1 crore is earned before retirement, then the rest of the life will be spent comfortably. Most people make plans and investments on this basis. But the important thing to think about is whether the current value of ₹ 1 crore will be remain the same even after the 10 or 20 next years. In this era of inflation, it is very important to assess your savings correctly so that your future is secure.
How much is ₹ 1 crore enough for a comfortable life after retirement
Everyone dreams of becoming a millionaire. To make this dream come true, people often invest money in the stock market or any investment scheme. In today’s time, ₹ 1 crore seems like a big amount to all of us. We think that if somehow ₹ 1 crore is earned before retirement, then the rest of the life will be spent comfortably. Most people make plans and investments on this basis. But the important thing to think about is whether the current value of ₹ 1 crore will remain the same even after the retirement age of 10 or 20 years. Let us understand the impact of inflation.
What will be the next upcoming value of the ₹1 crore after the next 10 years
As inflation price is increasing tremendously, the value of current money is also decreasing. For something that you had to spend ₹10 earlier, now you have to spend up to ₹50. If we assume an inflation rate of 6% per annum, then after 10 years the value of ₹1 crore will decrease to just ₹55.84 lakhs! That is, what you can buy today for ₹1 crore, to buy it after 10 years you will have to spend approximately ₹1.80 crore.
What will happen after 20 and 30 years
If we calculate with the same inflation rate, then after 20 years the amount of ₹1 crore will decrease to just ₹31.18 lakhs due to inflation. This means that for many things that can also be bought for the ₹1 crore today, you will need to have to spend ₹3.21 crore after the 20 years time. And after the next 30 years, the value of ₹1 crore will be even very less and it will be just of 17.41 lakh rupees.
Keep your savings safe
In such a situation, if investment plans are not made by properly assessing the inflation rate, then your savings will be much less than expected. When you retire after 10, 20, or 30 years, you will not be able to live a comfortable life with ₹1 crore. Therefore, keep the impact of inflation in mind while planning for the future.
Know important indicators
Consumer Price Index (CPI) and the Wholesale Price Index (WPI) are mainly used to measure the current inflation rate. These indices to measure the change in the prices of various goods and the services and help in calculating the different inflation rate. CPI reflects the change in prices of goods and services purchased by common people. To measure this, various goods and services are included in a basket and the change in their prices is measured. On the other hand, WPI measures the change in prices of goods purchased by wholesalers from each other.