Question 1

What is the 4% rule for retirement?

Accepted Answer

The 4% rule states that you can safely withdraw 4% of your retirement corpus each year without running out of money for 30+ years. So if your annual expenses are ₹6 Lakhs, you need a corpus of ₹1.5 Crore (₹6L ÷ 4%). This assumes a balanced portfolio generating ~6-7% annual returns.

Question 2

How much corpus do I need to retire in India?

Accepted Answer

A common Indian retirement rule of thumb is to build a corpus of 25x your annual expenses (equivalent to the 4% withdrawal rule). For example, if you spend ₹50,000/month today and have 20 years to retire (at 6% inflation), your future monthly expenses will be ~₹1.6 Lakhs. That means you need a corpus of roughly ₹5 Crore.

Question 3

How does inflation affect retirement planning?

Accepted Answer

Inflation silently erodes purchasing power. At 6% inflation, ₹50,000/month today becomes ₹1.6 Lakhs/month in 20 years. This means your required retirement corpus nearly triples compared to what you would calculate at today's expenses. Always factor in an inflation rate of 5-7% when planning for retirement in India.

Retirement Calculator