Why saving enough for retirement is difficult

Longevity risk, taxes, financial repression, unexpected high inflation, career risk, and psychological factors make it very difficult to save enough for retirement

If you don’t find the amount that you should ideally save each month for retirement shockingly high, then you have most likely made a mistake in calculating the amount that you will need (as I have written previously in this newspaper). Here are six reasons why it is so difficult to build an adequate retirement corpus.

Longevity risk

A 60-year-old upper-middle-class Indian woman is, on average, likely to live till the age of 83. So, if she plans for expenses till the age of 83, then there is a 50 per cent probability that she will live longer than that, and run