Last Updated on June 21, 2026 at 9:05 pm
Here are some questions you need to ask before you retire early or on schedule. We also include recommendations of the freefincal robo advisor tool where relevant.
1. Do I have a strong emergency fund to handle unexpected expenses? We recommend at least 5% of the corpus.
2. Do I have a robust health insurance policy? Will my emergency fund cover at least simple hospitalisations if my insurer denies cashless and wants me to apply for reimbursement? We recommend a base policy for at least 10 Lakhs. So the emergency fund should at least match this!
3. Do I have the ability to repair or replace gadgets at will? Laptops, mobile phones, appliances, and so on? We recommend some form of gainful employment or robust passive income to handle these expenses.
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4. How am I going to handle discretionary expenses? We recommend using your active or passive income streams, or portfolio dividends or redemptions (in bumper years)
5. Am I prepared to handle poor market returns in the first 10-15 years of retirement? We recommend not going overboard on equity – 40% is the upper limit even for pretty large portfolios. We also recommend holding enough money in a safe, nearly risk-free fixed income and drawing inflation-indexed income (a 5-6% increase each year) from it for the first 10-15 years of retirement. During this time, the equity corpus can grow.
Many dismiss this overtly conservative as nearly half the corpus available at the start of retirement will go into this income “bucket”, but it is better to be safe than sorry.
6. What is my portfolio management strategy? Am I going to use hybrid funds for retirement buckets? Am I going to actively churn the buckets? Am I going to do it occasionally? Am I going to use one retirement bucket after another? If you are new to the idea of retirement buckets, here are some resources that may help.
- How to deploy money in a retirement bucket strategy
- Implementing a retirement bucket strategy with minimal churn
- Using hybrid funds to build a retirement bucket strategy
- How can I make a retirement bucket strategy work?
7. How am I going to handle finances in the latter part of retirement as my health fades? Some options are – moving to considerable cash, working closely with relatives or a SEBI-Registered fee-only advisor.
8. How is my relationship with my loved ones? People matter as much as money. We need all the physical and emotional support we can get in retirement. So it is time to strengthen bonds and mend bridges.
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