Why Most Retirement Planning Calculations Fail — And What You Should Do Instead
A more realistic, empowering approach to answering the question: “Do I have enough?”
Over the years, I have met countless professionals in their 40s and 50s — sharp, responsible, financially aware. Many of them have run their own numbers for retirement. They have Excel sheets, calculators, SIPs, and a plan. Or at least, they think they do.
And yet, when we sit down and go deeper, a quiet discomfort emerges.
Because deep down, they know: something is off.
This article is for them — and for you, if you have ever felt that planning for retirement is like chasing a mirage.
The Standard Retirement Planning Process — and Where It Falls Short
Most people who try to take charge of their retirement follow a version of this 5-step process:
- Estimate their future expenses
- Inflate them by 6–7% to account for rising costs
- Calculate the corpus required to sustain those expenses till age 90 or 95
- Deduct what they already have
- Begin a disciplined investment plan to fill the gap
It sounds methodical, even scientific. And in theory, it should work.
But in practice, it often falls apart. Let us examine why.
1. The gap is often too big — and deeply discouraging
One of the most common outcomes of this approach is a projected “retirement gap” of ₹3 crore, ₹5 crore, sometimes more.
To bridge that, the investor is often told they must invest ₹1–2 lakh a month, starting immediately. For many people, especially with family responsibilities and lifestyle costs, that simply is not feasible.
The result? Not motivation — but resignation. They shut the Excel sheet and go back to hoping the future will somehow sort itself out.
2. It ignores life between now and retirement
The other major flaw is that this model treats retirement as the only financial goal.
But life between age 45 and 60 is often the most financially demanding period:
- Children’s higher education
- Weddings
- Real estate upgrades
- Sabbaticals, health expenses, or elder care
A retirement plan that ignores these realities is like driving with blinders on. It may feel precise — but it is incomplete.
3. It treats retirement as one monolithic phase
Perhaps the most subtle, yet significant limitation of this approach is the assumption that retirement is a uniform 30-year period with consistent expenses.
It is not.
The first decade after retirement often involves:
- Travel
- Pursuit of hobbies
- Starting something new
- Higher discretionary spending
The later years may look very different:
- Increased medical costs
- Lower travel or lifestyle expenses
- A stronger desire for stability, giving, or staying close to family
Good planning must reflect these natural transitions — not just average them out.
So what do we do differently?
At House of Alpha, we approach this with a fundamental shift in perspective.
We believe that retirement planning should be built on real life, not just real numbers.
It should give people clarity, options, and peace of mind — not just a big number to chase.
Here is how we go about it.
1. We start with time, not just money
The first step is understanding how the individual or couple actually envisions their retirement years.
- How do they want to spend their time?
- Where do they want to live?
- What kind of engagement, travel, or lifestyle do they foresee?
- Will they continue to earn in some capacity?
This is not a philosophical exercise. It is practical.
Because how you spend your time is the single biggest driver of how you will spend your money.
2. We project income and expenses across the full journey — not just post-retirement
We build a detailed cash flow model from now till end of life, which includes:
- All known and expected sources of income: salary, bonuses, retirals, rental income, policy maturities, possible inheritances
- All foreseeable expenses: current lifestyle, education, weddings, car or home upgrades, and long-term care
- Inflation assumptions that vary by category (medical, education, lifestyle)
This gives us a comprehensive view of financial reality, not a partial snapshot.
3. We base investment capacity on real surpluses, not wishful SIPs
Instead of plugging in arbitrary SIP numbers to bridge the gap, we look at year-on-year surpluses:
- What is the actual investible surplus available, after all responsibilities?
- What is the most efficient way to allocate it — across liquidity, returns, and risk?
This creates a plan that is doable, not just desirable.
4. We simulate how long the money will last
Once we map income, expenses, and potential returns, we run longevity projections:
- How long will the current wealth, plus future savings, actually sustain the family’s needs?
- What happens in good markets — and in bad?
- When might the portfolio run dry under different scenarios?
This gives a more honest, grounded picture of sustainability.
5. We work backwards to find the required rate of return
This is one of the most powerful steps.
Instead of guessing what returns we might get, we calculate:
“What return must this portfolio deliver — consistently — to make the plan viable?”
If the number is 8%, we build a portfolio that targets 8% while managing volatility. If the number is 11%, we pause and re-evaluate. Because return is not a dial we can turn at will.
6. If the numbers do not work — we adjust the right levers
At this point, the conversation often becomes empowering.
Because we now know the gap. And we can explore ways to bridge it — not just by investing more, but by:
- Increasing income or extending work life by a few years
- Rethinking certain future expenses
- Exploring real estate monetization options
- Adjusting lifestyle assumptions based on actual preferences
The plan becomes dynamic — shaped by both numbers and choices.
7. If the numbers do work — we unlock possibilities
And often, we find that people are in a better position than they feared.
In those cases, the clarity gives them freedom:
- To retire a few years earlier
- To take a sabbatical or career break without guilt
- To support their children or parents more generously
- To live more fully, knowing they have enough
Why This Approach Works Better
This process works not because it is complex — but because it is complete.
It brings together:
- Lifestyle clarity
- Financial realism
- Portfolio strategy
- Contingency planning
And most importantly, it keeps the individual at the centre of the process — not just the corpus.
Final Thought
“How much is enough?” is not a number you can Google. It is a number you must uncover — through a process that respects both your life and your money.
And that is what good retirement planning really is.
Not just a projection of wealth. But a design for how you want to live — and a strategy to make it possible.
If this article resonated with you:
Drop a comment. Share your perspective. Or reach out if you want to explore what “enough” really looks like in your own life.
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