Yeah, thanks. Great insight there. I have 100 rupees today, they may be worth 100 crores tomorrow. Because "numbers are irrelevant."
I hope you realize that all retirement planning is based taking into account inflation and time value of money? Saying 1,00,00,000 today will be equivalent to 10,000 in 15 years is plain foolishness. FWIW, I am assuming that the annualized inflation rate for India will be 6-8% in the next 5-15 years.
Fire your retirement planner, or hire one.
Funny how you quote just 'numbers are irrelevant' and not the complete sentence which was 'numbers are irrelevant in that post'.
I said numbers were irrelevant in his post as they didn't present an accurate picture. I think this is what you meant too, so the sarcasm in your post is strange. But again, the concepts in that post were very much relevant as I have learned in my interactions with people around me. Most are least bothered about inflation and scarily enough, believe it won't affect their plans. Bottomline is, it won't hurt to inflate your assumed inflation figure by a couple of notches just as a precaution.
Once you understand inflation, the numbers starts to make sense. I know this because one talks with friends about these things right. So this one instance, we got talking about same topic as the subject of this thread. Based on present expenses and expected lifespan, a friend's retirement corpus figure at his desired retirement age was around the 3-4 crore mark. He refused to believe that figure. This was classic denial, innumeracy, and inability to understand the impact of inflation. Upon explaining inflation, he started to see the gist of it. At the same time, when I showed him the monthly investments he'll need to make to create the above mentioned corpus at his desired retirement age, he was flabbergasted (in a good way). Assuming a long term return of 10-12% (this figure can be outrageously ambitious or outrageously cynical depending on whom you talk to), he needed to invest around 45% of his net monthly pay (current pay that is). This was compounding at work. So he neither understood inflation nor compounding (which also happens to be your best weapon against inflation). Numbers are indeed irrelevant till the time one understands these concepts.
Inflation and time value are two aspects of retirement planning, compounding of your investments is another. The latter is of great significance if one starts early. And for a realistic figure, 1 crore will probably be around 1/3 rd its present value after 15 years at about 6-8% inflation.
No one is arguing with what you are pointing out. And thanks for the advice but I probably won't need the services of a retirement planner (not at least now) as I believe it is very much a DIY job and a degree of pessimism/ultra-realism while doing so wouldn't harm me in any which way.
P.S. - Pessimism helps because inflation is a really unpredictable animal. One kind may affect you (hospitalization), while the other might not [assuming you don't have kids(education) or if you have a very frugal lifestyle (lifestyle expenses)].
