How long will my corpus actually last?

Accumulation gets all the attention. The harder question arrives on the day the salary stops: you have a number, you need it to produce an income, and you need that income to keep pace with prices for a period whose length you do not know.

Most retirement planning stops at the corpus. The corpus is the input, not the answer.

Three numbers, and one of them dominates

How long a pot lasts depends on what you withdraw, what it earns, and how fast prices rise. People spend most of their effort on the return assumption, which is the one they control least and which matters less than they think.

The withdrawal rate dominates. Taking four per cent of a corpus a year is a very different proposition from taking six, and the difference is not a third — it is frequently the difference between a pot that outlives you and one that runs out in your seventies.

Inflation is the part that gets left out

A withdrawal that stays flat is a withdrawal that shrinks. At six per cent inflation, money halves in purchasing power in about twelve years — so a fixed ₹60,000 a month at 60 buys roughly what ₹30,000 buys today by the time you are 72.

A realistic plan raises the withdrawal each year to hold the standard of living steady, and that changes the arithmetic considerably. A corpus that lasts thirty years on flat withdrawals may last twenty on rising ones.

Sequence risk, and why averages mislead

Two portfolios can earn the same average return over thirty years and produce completely different outcomes, depending on when the bad years arrive. A sharp fall in the first few years of drawdown is far more damaging than the same fall two decades later, because you are selling units at depressed prices to fund withdrawals and those units never recover.

The usual mitigation is holding two or three years of planned withdrawals in something stable, so a bad market can be ridden out without selling into it. It costs a little return and removes the failure mode that does the most damage.

The 4% rule, and why it travels badly

The familiar guideline — withdraw four per cent in year one and raise it with inflation — comes from a specific study of a specific market over a specific period. It is a useful starting point and a poor universal law.

Indian inflation has generally run higher than the environment that rule was derived in, which argues for a lower initial rate rather than a higher one. Treat four per cent as a conversation opener, run your own numbers, and then run them again at a worse return.

1. 1Start from the monthly income you need, in today's money.
2. 2Inflate it to your retirement date. This is where the number stops feeling comfortable.
3. 3Work out the corpus that supports it at a withdrawal rate you can defend.
4. 4Test it at a return two or three points lower, and check the plan still holds.
5. 5Keep two to three years of withdrawals outside equity.

Getting to the number is the other half of the problem — see SIP or lump sum and, for where the safe portion belongs, where to put your money in India.