Ramesh Chowdhury (name changed), 60, has retired with a corpus of Rs 1 crore. He aims to make this money last for his entire lifetime. To achieve a balance of growth and safety, he invests in a combination of equity mutual funds and safe debt options like bonds or fixed deposits. To generate a steady monthly income, he has set up a systematic withdrawal plan. This strategy helps him maintain regular cash flow while keeping his savings sustainable for 25 to 30 years, with some liquidity available for unexpected expenses such as medical bills.
The golden years of one’s life are meant to be spent doing things once never really got around doing in their working years whether it is traveling, playing golf of following a hobby. And for this it is important that your retirement corpus lasts you and gives you a healthy income.
Balancing Growth, Safety, and Liquidity
Rs 1 crore corpus can comfortably last 25–30 years if managed with discipline and the right asset allocation.
“The first step is to calculate how much monthly income is required for household expenses and other needs, then build an allocation strategy around that. The guiding principle must be to never lose capital. Equity will move up and down, but the real danger lies in defaults or credit events in fixed income that erode principal,” says Ajay Kumar Yadav, CFP CM, Group CEO & CIO , Wise FinServ, a financial planning firm.
Safe fixed income instruments like fixed deposits, secured high-rated bonds, senior citizen savings schemes (for those over 60), annuities, and debt mutual funds can together provide a blended Compounded Annual Growth Rate (CAGR) of about 8 percent.
“Fixed income feels safe but loses value over time. Inflation erodes real returns, taxes eat into interest, and debt instruments rarely deliver more than 1–2 percent above inflation. If you only stick to FDs or bonds, your money may not last the full 25–30 years,” says Suri.
It is also important to prefer instruments that pay monthly or quarterly income, so retirees have a steady flow of cash to meet household expenses without dipping into capital.
Making Rs 1 crore Last 25–30 Years
A 25–40 percent allocation to equity can keep your corpus growing. “The key rule: your withdrawal rate should be lower than the growth rate of your equity assets. Using mutual fund SWPs (Systematic Withdrawal Plans) is a smart way to generate income without stopping compounding,” says Amit Suri, CFP and funder of AUM Wealth, a wealth management firm.
Equity allocation should go into large-cap funds, balanced advantage funds, and multi-asset allocation funds.
“Among these, multi-asset allocation funds and balanced advantage/dynamic asset allocation funds can be considered “all-season funds”, since fund managers can dynamically balance between equity, debt, gold, and silver. Over the long term, equity allocation can reasonably deliver 12 percent CAGR,” says Yadav.
The added advantage is taxation. Under the new regime, there is no tax liability up to Rs 12 lakh annual income, and equity remains highly tax efficient with LTCG taxed at just 12.5% (beyond Rs 1.25 lakh) and STCG at 20 percent.
Scenario Analysis
Let us assume that equity delivers around 12 percent annual returns, while fixed income grows steadily at about 8 percent.
The client’s annual income needs starts at 6 lakh, and it’s adjusted every year for inflation. If the annual income needs are larger then the bigger corpus will be required. For the first ten years, inflation is assumed at 5 percent. From the 11th to the 20th year, it’s taken at 4.5 percent, and for the last decade, 4 percent.
Out of this, the fixed income portfolio generates about Rs 4.8 lakh each year. The remaining amount is withdrawn from mutual funds through a Systematic Withdrawal Plan (SWP). Instead of following a fixed withdrawal rate, this plan adjusts the SWP amount each year based on the changing income requirement( Inflation adjusted).
This flexible, inflation linked approach helps the investor meet expenses comfortably without putting undue strain on the portfolio. The combination of high market returns, prudent withdrawals, and steady compounding ensures that wealth not only lasts throughout retirement but also creates a meaningful legacy for the next generation.
Why Portfolios Need a Regular Health Check
Volatility is best managed through diversification and discipline. Equity exposure should be spread across large-cap, balanced advantage, and multi-asset funds where fund managers dynamically adjust allocations,
“Regular rebalancing ensures the portfolio stays aligned with the retiree’s risk profile. This approach lets equity compound quietly in the background, fighting inflation, while day-to-day volatility in income stays minimal,” says Yadav.
Another way to manage volatility is asset allocation. Retirees can manage equity volatility while still benefiting from long-term returns through a strategic and tactical approach to asset allocation.
“A strategic asset allocation sets a long-term framework for your portfolio, deciding the overall mix of equity, debt, and other assets based on your risk appetite and retirement goals,” says Aditya Agarwal, Co-Founder, Wealthy, a wealth tech platform.
Alongside this, a tactical asset allocation allows adjustments based on market opportunities. For example, when equity valuations are attractive, retirees can increase their exposure to benefit from potential growth, and when markets are overvalued or volatile, they can reduce equity allocation to protect their corpus.
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