- Salaried professionals must invest by 35 to avoid future financial hardship and medical costs
- Starting investments late greatly increases the monthly amount needed due to lost compounding benefits
- Good medical insurance is critical as healthcare costs will rise significantly over time
One of India's top investment managers has a brutal warning for anyone who has reached 35 without investing: your salary will stop one day, your medical bills will not, and you could spend the final years of your life running out of money.
Swarup Mohanty, Vice Chairman and CEO of Mirae Asset Investment Managers, said salaried professionals must confront the possibility that they could live for decades after their active income disappears.
"At 35, one should realise that one is going to live very long," Mohanty said during a podcast with Finnovate. "At some point, what we call active income will stop for a salaried person. Then you have to live the rest of your life based on how much money you have."
For someone who has failed to invest, he described that future as a "very, very scary proposition".
"At that point, your only friend will be money. Everything that you want to do will be driven by money," Mohanty said. "If you do not realise that at 35 years of age, you have already done a lot of disservice to yourself."
The cost of waiting, he explained, can be punishing because a late investor loses years of compounding.
"If you want to earn, say, Rs 10 crore and you start at 20, at 12% you need to invest some Rs 10,000 to Rs 20,000 per month," he said. "But if I were to start that at 40, probably I will have to invest Rs 2 lakh per month or something of that sort."
"That is the opportunity cost that has already left you," he added.
Mohanty said 35 was not too late to begin, but warned against delaying the decision any further.
"At 35, you are still not bad. You can start. But realising the need for money is most important," he said. "The biggest disservice that you will do to your old age is not investing as of yesterday."
His second warning concerned medical insurance.
"Not having good medical insurance is another mistake because your health is very critical and healthcare will become expensive," Mohanty said. "Catch hold of a good planner. Start investing as if there is no tomorrow because that is your dire need."
Retirement strategist Milind Deogaonkar says the anxiety does not necessarily disappear even after a person has built a sizeable corpus. Many retirees remain afraid to spend because they do not know how much they can safely withdraw without exhausting their savings.
That uncertainty, he said, leads people to cancel trips, choose smaller rooms and even postpone health check-ups despite having the money.
Deogaonkar estimates that with inflation at 6% to 7% and medical inflation at 12% to 14%, a traditional Indian retiree may need to restrict annual withdrawals to between 2.5% and 3.5%, depending on personal circumstances and asset allocation.
At a 3% withdrawal rate, a Rs 2 crore corpus would provide Rs 60,000 a month. A Rs 3 crore corpus would provide Rs 90,000.
He also recommends keeping a separate healthcare buffer of Rs 35 lakh to Rs 50 lakh for a retired couple living in a metro and relying on private hospitals. Without it, one serious hospitalisation could force a family to break into its main retirement corpus at precisely the wrong time.
"Most people approaching retirement have spent 30 years learning how to accumulate," Deogaonkar said. "They have spent almost no time learning how to withdraw."
Mohanty insisted that his warning was not an attempt to create panic.
"I'm not scaring you. I'm leaving behind a brutal truth," he said. "If you are going to live till 95, those last 10 or 15 years can be very, very brutal if you don't have money."
