DON’T START RETIREMENT PLANNING WITH A RS 40 CRORE TARGET

Dezerv co-founder Sandeep Jethwani’s Rs 40 crore retirement plan has gone viral, sparking debate around how much is enough to retire. But the real question is not whether Rs 40 crore will suffice; it is what monthly income you will need after retirement, and how to build for it.

Retirement is ultimately a cash-flow problem, not just a corpus target. With inflation steadily pushing up costs over time, a fixed number may not reflect individual needs or future realities.

“Retirement planning should start with future spending needs, not a single corpus target,” says Lt Col Rochak Bakshi, CFP, Trunor Enterprises.

Here are 6 key factors you need to get right while planning your retirement:

Plan for inflation, especially healthcare

Inflation is one of the biggest risks to retirement planning, and applying a single number across expenses can lead to underestimation.

Bakshi suggests using a long-term inflation assumption of 4-7 percent, but warns that healthcare costs should be treated separately, with a higher estimate of 10-15 percent annually. “Do not apply the same inflation number to groceries and hospital bills,” he adds.

The impact can be significant. According to Aditya Agarwal, co-founder of Wealthy.in, “A monthly expense of Rs 40,000 today could rise to nearly Rs 1.7 lakh in 25 years at 6 percent inflation. This sharp increase highlights why retirement planning must be anchored to future expenses rather than current spending.”

Focus on post-tax income, not just returns

Returns alone do not determine retirement readiness, what matters is how much income is available after taxes.

Karan Aggarwal, co-founder and CIO at Ametra, says, "Investors should factor in the tax impact of different instruments while building and drawing from their retirement corpus. Income from certain fixed-income products can be taxed at applicable slab rates, which may reduce effective returns over time."

He suggests structuring investments in a way that allows better control over withdrawals, so income can be aligned with actual needs while keeping tax efficiency in mind.

Start early and increase investments over time

Time and consistency play a critical role in building a retirement corpus. Starting early allows investors to benefit from compounding, but keeping contributions static can create gaps.

Agarwal illustrates this with an example: a Rs 1 crore investment growing at 12 percent annually over 25 years can become around Rs 17 crore. However, rising expenses due to inflation can still outpace withdrawals if contributions are not increased over time.

A monthly SIP of Rs 50,000 over 25 years can grow to about Rs 9.4 crore at similar returns. But if the SIP is increased by 10 percent every year, the corpus could rise to around Rs 21 crore.

The takeaway, he says, is simple: “staying invested and stepping up contributions regularly is more effective than trying to time the market.”

Get asset allocation right and review it regularly

Asset allocation is central to balancing growth and stability in a retirement portfolio.

Bakshi recommends a gradual reduction in equity exposure as retirement approaches, around 75-85 percent in the 20s, 65-75 percent in the 30s, 50-65 percent in the 40s, 35-50 percent in the 50s, and 20-30 percent after 60, with the rest in debt and other assets.

“Portfolios should be reviewed every 6 to 12 months and rebalanced if allocations drift significantly. Where possible, rebalance using fresh contributions instead of selling assets,” he adds.

Agarwal further notes, “Asset allocation drives a significant portion of long-term returns, making it more important than short-term market timing.”

Maintain a separate emergency and healthcare buffer

Unexpected expenses can derail even well-planned retirement portfolios if there is no separate safety net.

Experts recommend maintaining an emergency fund covering 6 to 12 months of essential expenses, with the higher end suitable for those with variable incomes or dependents. This fund should be kept separate from retirement savings.

Aggarwal adds, “Investors should also account for contingencies by building an additional buffer into their retirement corpus, particularly for healthcare-related costs.”

Diversify beyond EPF and PPF

While EPF and PPF provide stability, relying solely on them may not be sufficient to meet long-term retirement needs.

Agarwal points out, “Fixed-income investments typically offer returns of 7-8 percent, while inflation runs at 5-6 percent, resulting in limited real growth. This makes it important to include growth-oriented assets such as equity mutual funds.”

For generating income in retirement, he suggests, “Systematic Withdrawal Plans (SWPs), which allow investors to draw regular cash flows while keeping part of the corpus invested.”

Aggarwal also emphasises the need for balance. “While fixed income provides stability, avoiding equity entirely can lead to missed growth opportunities. A mix of assets, aligned with individual goals and risk tolerance, is key to sustaining income over the long term,” he adds.

Bottom Line

A single retirement number cannot capture individual needs or future uncertainties. What matters more is whether the plan can generate a steady income over time while accounting for inflation, taxes, and healthcare costs.

The goal is not to chase a number, but to build a retirement plan that works in real life.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

2026-05-01T08:47:29Z