How Long Will Your Retirement Fund Last?

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Your Corpus Will Last For
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Checking sustainability...

Important Consideration

This simulation assumes you increase your withdrawal every year to keep up with inflation, ensuring your standard of living remains constant.

Retirement Planning: The Challenge of Longevity Risk

One of the biggest fears for retirees is outliving their money. In the financial world, this is known as Longevity Risk. With increasing life expectancies in India, it is common for people to spend 30 or even 40 years in retirement.

The Triple Threat to Retirement

  1. Inflation: A monthly expense of ₹1 Lakh today will require ₹3.2 Lakhs in 20 years just to buy the same things (at 6% inflation).
  2. Low Interest Rates: Traditional safe assets like FDs often barely beat inflation, leading to a "negative real rate of return."
  3. Sequence of Returns Risk: Poor market performance in the first few years of retirement can deplete your corpus significantly, even if the average long-term return is good.

Strategic SWP (Systematic Withdrawal Plan)

To make a corpus last, most experts suggest a sustainable withdrawal rate of 4% to 5% of the initial corpus per year. By investing a portion of the corpus in balanced or hybrid mutual funds, you can aim for returns that are 2-3% above inflation, which is the key to a "perpetual" retirement fund.