Accumulation — building the corpus
- Fix the retirement age and the expenses you want to fund
- Inflate today's expenses to your retirement year at 6 to 7 percent
- Save through a mix of EPF/NPS, market-linked plans and guaranteed products
- Step up contributions with every increment
Distribution — turning corpus into income
| Bucket | Purpose | Typical instrument |
|---|---|---|
| Essentials | Rent, food, utilities, medicines | Annuity or guaranteed income plan |
| Lifestyle | Travel, family, discretionary spends | Balanced portfolio withdrawals |
| Emergency | Medical and unforeseen costs | Liquid funds plus health cover |
Do not retire your health cover
Employer group cover ends the day you retire, and buying fresh cover at 60 is costlier with fresh waiting periods. Hold a personal health policy well before retirement so waiting periods are already served.
Review points
- Re-check the corpus target every three years against actual inflation
- Keep nominations and spouse continuation options updated
- Reduce equity exposure gradually in the five years before retirement
Frequently asked questions
How big should my retirement corpus be?
Estimate your current monthly expenses, inflate them to your retirement year, and plan for 25 to 30 years of withdrawals. The retirement calculator on this site does the maths for you.
Is an annuity better than keeping the corpus invested?
An annuity gives income you cannot outlive, which suits the essential-expenses portion. Keeping a part invested keeps up with inflation. Most retirees need both.
When should I start?
As early as possible. Starting at 30 instead of 40 can roughly halve the monthly contribution needed for the same corpus, because compounding gets ten more years.