Retirement Investment Plan for ₹1 Crore Corpus
A disciplined 60:40 portfolio with SWP can fund 30+ years of retirement. Avoid annuities unless guaranteed income is critical.
6/13/20252 min read
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
Allocate: 60% equity, 40% debt.
Withdraw: 4–5% annually via SWP + SCSS.
Tax Hack: Use SWP for tax-efficient income.
NPS: Defer annuity; maximize lump-sum withdrawal.
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."*
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