Retirement Investment Plan for ₹1 Crore Corpus

1. Start Early & Stay Disciplined

• Begin planning at least 10–15 years before retirement to maximize compounding.

• Goal: Preserve capital while generating inflation-beating income.

2. Asset Allocation Strategy

Asset Class: Equity, Allocation 60-65% & Instrument: Large-mid , multi cap , flexi cap

Asset Class: Fixed Income, Allocation 35-45% & Instrument: Senior Citizen Savings Scheme (SCSS), Post Office MIS, Short-Term Debt Funds

Key Notes:
✅ Yearly Rebalancing: Maintain 60% equity + 40% debt to manage risk.
✅ Equity Focus: Ensures growth to combat inflation (target 10–12% CAGR).
✅ Debt Stability: SCSS offers 8.2% interest (2024) with quarterly payouts.

3. Withdrawal Strategy

• Safe Withdrawal Rate (SWR):

  • 4% (Ideal): ₹4 lakh/year (₹33k/month) – Higher sustainability.

  • 5% (Moderate): ₹5 lakh/year (₹42k/month).

  • Max 6%: ₹6 lakh/year (₹50k/month) – Riskier long-term.

• Annual Review: Adjust withdrawals based on market performance and inflation.

4. Tax-Efficient Income

A. Systematic Withdrawal Plan (SWP)

• Tax Benefit: Only gains are taxable; principal is tax-free.

• Exemptions:

  • ₹1.25L/year (long-term capital gains tax exemption under Sec 112A).

  • ₹2.5L/year (basic exemption limit).

• Advantage: More tax-efficient than dividends/interest (fully taxable).

B. Avoid Annuity Plans

❌ Low Returns: Typical annuities yield 5–6% (below inflation).
❌ Lock-In: Lumpsum becomes illiquid; heirs may lose corpus.
✅ Better Alternative: Self-manage withdrawals via SWP + SCSS combo.

5. National Pension System (NPS) Optimization

• At Age 60: Withdraw 60% lump sum tax-free (₹60L from ₹1Cr).

• Defer Annuity to 75: Invest the ₹60L in debt funds/SWP for higher returns.

• Why? Annuities post-75 may offer better rates due to shorter life expectancy.

6. Additional Tips

• Emergency Buffer: Keep 1–2 years’ expenses in liquid funds.

• Healthcare Cover: Secure super top-up health insurance (₹20L+ cover).

• Estate Planning: Nominate heirs for all accounts; consider a will.

Summary: Your Action Plan

1. Allocate: 60% equity, 40% debt.

2. Withdraw: 4–5% annually via SWP + SCSS.

3. Tax Hack: Use SWP for tax-efficient income.

4. NPS: Defer annuity; maximize lump-sum withdrawal.

5. Review Yearly: Rebalance + adjust withdrawals.

Example:

• Corpus: ₹1Cr

• Annual Withdrawal (4%): ₹4L (₹33k/month) + SCSS interest (~₹24k/month).

• Growth: Equity keeps corpus growing to offset inflation.

Final Advice:
*"A disciplined 60:40 portfolio with SWP can fund 30+ years of retirement. Avoid annuities unless guaranteed income is critical."*

Need a customized plan? Please get in touch with us.