25-33x annual expenses (factor 6-7% inflation). EPF + NPS + PPF + equity SIP mix. Age-based glide path. ₹5cr corpus = ₹17.5L/yr at 3.5% SWR. Start early for compounding.
RETIREMENT CORPUS RULE: 25-30x ANNUAL EXPENSES. EXAMPLE: ₹50K monthly expense = ₹6L annual. (a) 25x: ₹1.5cr. (b) 30x: ₹1.8cr (safer). BUT factor INFLATION: ₹6L today = ₹24L annual in 25 years (6% inflation). CORPUS NEEDED at retirement: ₹24L × 25 = ₹6cr. KEY FACTORS: (1) Current age + retirement age. (2) Life expectancy (assume 85-90). (3) Inflation 6-7%. (4) Post-retirement returns 7-8%. (5) Lifestyle. STRATEGIC: most urban professionals need ₹5-10cr corpus.
SAFE WITHDRAWAL RATE (SWR): (1) 4% RULE: corpus × 4% = annual withdrawal. 25x expenses. (2) 3.5% RULE: 28.5x (more conservative for India). (3) 3% RULE: 33x (ultra-safe). INDIA CONSIDERATION: higher inflation (6-7% vs US 2-3%) — use 3-3.5% SWR. EXAMPLE: ₹6cr corpus at 3.5% = ₹21L annual safe withdrawal. STRATEGIC: Indian retirees should target 28-33x expenses (lower SWR) due to higher inflation + longer life expectancy.
RETIREMENT CORPUS MIX: (1) EPF: 8.25% mandatory salaried base. (2) NPS: 9-10% market-linked + 80CCD(1B) ₹50K extra. (3) PPF: 7.1% tax-free ₹1.5L/year. (4) EQUITY SIP: 12% long-term (index + ELSS + diversified). (5) DEBT: bonds + FDs for stability near retirement. AGE-BASED: (a) 20s-30s: 70-80% equity. (b) 40s: 50-60% equity. (c) 50s: 30-40% equity. (d) 60+: 20-30% equity. EXAMPLE: ₹50K monthly SIP × 30 years × 12% = ₹3.5cr (equity alone). Add EPF + NPS + PPF = ₹5-7cr total.
₹5cr CORPUS at retirement (30-year horizon): (1) EPF: ₹50K basic, ₹6K monthly contribution × 30yr × 8.25% = ₹85L. (2) NPS: ₹10K monthly × 30yr × 10% = ₹2.1cr. (3) PPF: ₹12.5K monthly × 30yr × 7.1% = ₹1.5cr. (4) EQUITY SIP: ₹15K monthly × 30yr × 12% = ₹5.3cr. TOTAL ~₹9.7cr (exceeds ₹5cr target). WITHDRAWAL: ₹5cr at 3.5% SWR = ₹17.5L annual = ₹1.46L monthly retirement income. STRATEGIC: start early — compounding power. ₹15K SIP from age 25 vs 35 = 3x difference.
RETIREMENT STRATEGY: (1) START EARLY — compounding is king. (2) TARGET 28-33x annual expenses (Indian inflation). (3) MIX: EPF + NPS + PPF (safe) + equity SIP (growth). (4) AGE-BASED equity glide path. (5) STEP-UP SIP 10% annually with income. (6) NPS 60% lumpsum + 40% annuity at 60. (7) SCSS + POMIS for post-retirement income. (8) HEALTH INSURANCE separate (medical inflation 12%+). (9) HOUSE = not retirement corpus (illiquid). (10) REVIEW every 3-5 years. (11) FACTOR life expectancy 85-90. (12) ENGAGE fee-only financial planner for ₹5cr+ goals. CRITICAL: inflation + longevity are biggest risks.