Not everyone who retires gets to rest.
A lot of people never reach a retirement corpus sufficient to sustain their remaining life without making more money.
But the crazy part is—even the ones who do hit their target corpus can still run out of money.
Because the real problem isn’t just building a corpus. It’s knowing how to use it smartly.
Everyone tells you only half of the picture. Well, this READ is going to change that forever!
How much would you actually need to retire?
The table below shows the amount you approximately need to retire (cover your expenses for 20 years without working) considering your annual expenses and time to retire.
This table is based on inflation @ 7%.
The difference with every 10 years passing is almost double. So it's essential to get started as soon as you can.
How to build your retirement fund?
While it’s a no-brainer to keep working on your skills and trying to scale your income as much as you can, investing is a solid long-term plan to get there.
Here’s how much you need to invest monthly at a rate of return of 12% p.a. on your investments, for different corpus values and time periods:
Looks steep, right?
Yet, the worst part is reaching your retirement corpus is only half of the job done.
If you don’t plan it well enough you still might not be able to live with peace even if you get to the corpus. Here’s what we forget to think about:
- How to plan finances?
- How to plan out taxes?
- How to withdraw money?
- How to make sure it stays safe and grows post retirement?
Well, we have found out something amazing for you—SWP!
What is SWP and how does it work?
SWP, or Systematic Withdrawal Plan, lets you withdraw a fixed amount from your mutual fund at regular intervals—monthly, quarterly, or yearly.
It’s a way to create steady income after retirement without liquidating your entire investment.
You can set up a SWP on your mutual funds investments through AMC / Bank websites, or demat / mutual fund accounts. Choose the amount, frequency and dates. Start receiving money in your bank account on the selected dates.
The best part is you stay invested while receiving monthly payouts, offering both growth and cash flow.
To know more about SWP check this out!
The Plan!
But first the dilemma—equity gives you high returns and has a very low probability of risk/loss if invested for a long term say 20-30 years . Hence if you want to build a significant corpus, equity is the way to go.
Pro-Tip: Invest in Index Funds which follow broad market indices like Nifty 50 or Nifty bank for a relatively safer investment option.
But, once you retire the scene changes!
Equity can be really volatile in the short term and you run the risk of booking huge losses while getting your systematic monthly withdrawals.
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Example
Raj has 1 Lakhs unit of a mutual fund and he set up as SWP of 1 Lakh per month.
Here’s how the units are sold for his SWP:
Higher units are sold when the price is less—taking a comparatively bigger chunk out of your portfolio. Then what can we do?
Split your retirement corpus
A smart way is to split your portfolio into 3 buckets once you reach retirement.
- 40% Equity
- 30% Hybrid-Equity-Oriented Funds
- 30% Debt + Hybrid-Debt-Oriented Funds
This way you can set-up your SWP from your Debt Funds and be safe from the volatility, while your money invested in equity helps it grow faster.
Conclusion
Retirement planning isn’t just about saving a big amount.
It’s about knowing what to do with it once you get there. Where should you invest to balance growth and stability? How do you withdraw without draining your gains or stressing over market dips? That’s the part most people get wrong.
SWP fixes this—it gives you monthly income, keeps your money growing, and takes the stress out of retirement.
With that part sorted, your job is simple: keep earning, keep saving, and let the system take care of the rest.
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