Most people in the country are insufficiently aware of pension provision issues because they do not take measures to plan during their working years and then regret it. Planning for retirement is a critically important decision for all working citizens, as despite regular income during employment, expenses remain after leaving work, while salary ceases. Without a formed pension fund, one must depend on others to cover essential needs in old age.
The calculation of the required pension capital depends on lifestyle, monthly expenses, and current age. Financial experts suggest using a simple method: the pension fund should be 100 times greater than the last salary. This principle, known as the '100x rule,' states that the amount saved at the time of retirement must be at least one hundred times higher than the last salary before withdrawal.
For example, if the last monthly salary is 100 thousand rubles, the required pension capital must reach at least 10 million rubles. This rule is based on the assumption that by investing this fund in safe instruments and withdrawing funds at a rate of about 5%, one can maintain the previous standard of living, taking inflation into account.
If a person aims to retire at age 60 and is currently under 30, they can build a significant pension fund with relatively small investments. Although some consider retiring at 40 or 50, most aim for 60. Consider this example: with an annual salary of 1.2 million rubles, if only one annual salary (1.2 million rubles) is saved, this fund can grow to approximately 3.6 billion rubles in 30 years, assuming an annual return of 12%. Thus, starting savings at age 30 with an amount of 1.2 million rubles can alleviate retirement worries.
If the age is 40, a lump sum investment of 3.6–4.8 million rubles is required. And for those planning to retire at 50, they need to invest at least 9.6 million rubles in a lump sum over 10 years. It should be noted that all these calculations are based on a hypothetical last salary of 100 thousand rubles.
The formula for the working class is as follows: at age 30—1 times the last salary; at age 40—4 times; at age 50—8 times; and at age 60—10 times the last salary.
When calculating, inflation must be taken into account. For example, today's 50,000 rubles per month could amount to about 160 thousand rubles per month in 20 years with an average inflation of 6%, so the fund cannot be based solely on current expenses. Furthermore, healthcare costs increase with age. In addition to the main pension capital, reliable medical insurance and a separate medical fund are extremely important.
A positive aspect for employed workers is that programs such as Employee Provident Fund and Gratuity automatically form a significant part of this pension capital.
Between the ages of 30 and 40, it is recommended to invest more in stocks to benefit from compound interest. This is an excellent way to build disciplined capital for retirement, combined with tax benefits. After age 50, risks should gradually be reduced, and funds should be transferred to low-risk instruments, such as bonds or fixed deposits.