I have ₹2 crore. Can I retire now, and how long will it actually last?
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Most retirement pages tell you the corpus you need. This one answers the harder question in the other direction: given the corpus you already have, can you stop working, and if not, by how much are you short.
Why a Large Corpus Can Still Run Out
₹2 crore sounds like enough because it is measured against today’s prices. Retirement is not spent at today’s prices. A household spending ₹80,000 a month now will be spending roughly ₹1.44 lakh a month in fifteen years at 4 percent inflation, and about ₹2.16 lakh at 7 percent. The corpus does not grow to meet that automatically; it has to out-earn inflation while being drawn down at the same time.
The variable that decides the outcome is not the return and not the inflation rate on their own, but the gap between them. A corpus earning 8 percent while inflation runs at 6 percent is compounding at roughly 1.9 percent in real terms. A corpus earning 8 percent while inflation runs at 4 percent is compounding at nearly 3.9 percent, twice as fast, from exactly the same investments. This is why two people with identical corpuses and identical spending can get answers twenty years apart.
The model below does not use a rule of thumb like 4 percent. It runs the balance forward one month at a time, grows the withdrawal every year by your inflation rate, and reports the month the balance reaches zero. It also solves the inverse: the highest monthly spend, in today’s rupees, that the corpus can sustain all the way to your planning age.
Corpus Longevity Model
How to Read the Result
The maximum sustainable monthly spend is usually the most useful line on this page. It is expressed in today’s rupees and it already contains the annual inflation increase, so it answers the question people actually have: what standard of living does this corpus buy, permanently. If that figure is comfortably above what you spend now, you are not asking whether you can retire, you are asking what to do with the surplus.
The corpus needed line is the same calculation run backwards, and the difference between it and what you hold is the honest size of the gap. Note that the gap is not the amount you need to save. It is the amount you need to have at retirement, so the amount to save is smaller once you allow for the years of compounding between now and then.
Treat every one of these numbers as a single point on a wide distribution. The model assumes a smooth return every month. Real markets deliver the return in a jagged sequence, and a poor sequence in the first five years of drawdown does disproportionate damage because you are selling units at low prices to fund the same withdrawal. That is sequence-of-returns risk, and it is the main argument for holding two to three years of spending in short-duration debt rather than running the whole corpus in equity.
What Changes the Answer
The gap between return and inflation
Not the return alone. A corpus at 8 percent with 6 percent inflation compounds at about 1.9 percent in real terms; at 4 percent inflation it compounds at nearly 3.9 percent. Doubling the real rate roughly halves the corpus you need, which is why the inflation input deserves as much thought as the return input.
Health costs, which do not follow general inflation
Medical inflation in India has consistently run well above headline CPI, and health spending rises exactly when everything else in this model is most fragile. Either raise the inflation assumption, or hold a separate health corpus and a personal insurance policy outside the retirement corpus entirely.
Any income that continues past retirement
Rent, a pension, an annuity, EPS, part-time consulting. Every rupee of continuing income reduces the withdrawal, and reducing the withdrawal in the early years is worth much more than the same reduction later because the corpus keeps compounding on the money you did not take out.
The order in which returns arrive
The model applies a smooth monthly return. A bad first three years followed by a good decade produces a materially worse outcome than the same returns in the opposite order, even though the average is identical. Holding near-term spending in cash and short-duration debt is the standard defence.
How We Calculated This
The Decision Framework
Frequently Asked Questions
Is the 4 percent withdrawal rule valid in India?+
Should I use nominal or real returns in this model?+
Does this account for tax on withdrawals?+
What if I retire and then go back to work part-time?+
How much should stay in equity after retirement?+
Why does my answer change so much when I move inflation by one point?+
Sources and Method References
- PFRDA — pension and annuity framework in India
- Reserve Bank of India — inflation and interest rate data
- Income Tax Department — capital gains treatment on redemptions