Can we achieve financial independence in 13 years starting from scratch?

Published: August 17, 2022 at 6:00 am

A reader asks, “Sir, My wife and I are both working in the same company and do wish to have children. We are both aged 27. We have just started working in well-paid jobs, so our networth is essentially zero. Our dream is to put an end to salaried existence in at least 13 years’ time by the time we turn 40. Can we achieve financial independence in 13 years, starting from scratch?”

When we sought more details, the couple mentioned that their current monthly expenses are about Rs. 30,000. They did not wish other details to be disclosed in the article.

Let us find out what the freefincal robo advisory tool coughs up for this scenario. The assumptions and inputs are listed below.

  • Age at the end of the current year: 27
  • Age you wish to retire 40
  • Years to retirement 13
  • Total average monthly expenses (annual/12) Rs. 30,000
  • Percentage by which your monthly investments can increase each year (until you have accumulated enough for retirement) 10%
  • Post-tax return expected from equity investments 9% (expect less, and you will not be disappointed!)
  • Post-tax return expected from current taxable fixed income 6%
  • Rate of return expected from current tax-free fixed income 7%
  • Inflation before retirement 6%
  • The assumed life expectancy of the younger spouse: 90 (in this case, both of them are the same age)
  • Inflation during retirement 6%
  • Years to retirement 13
  • Monthly expenses in the first year of retirement Rs. 63,988
  • Years in retirement (until younger spouse reaches age 90) 50


  • Retirement Corpus required 2,98,39,853
  • Initial monthly investment required, including EPF/NPS contributions Rs. 46,331

The investment schedule generated is given below.

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AgeMonthly investment in equityMonthly investment in fixed income, including total EPF/NPS contribution. If the EPF/NPS contribution is greater than this, adjust the equity investment to align with the suggested asset allocation (above graph or columns H & I
28     27,799     18,533
29     30,579     20,386
30     33,636     22,424
31     37,000     24,667
32     40,700     27,133
33     42,680     31,937
34     44,648     37,431
35     46,583     43,703
36     48,459     50,856
37     50,245     59,002
38     51,902     68,269
39     53,389     78,799
40     54,654     90,753

The suggested asset allocation schedule is given below.

Suggested asset allocation before achieving financial independence
Suggested asset allocation before achieving financial independence

After retirement, the calculation assumes the use of a retirement bucket strategy as explained here:

In summary, can this couple achieve financial independence in 13 years, starting from scratch? They certainly can if they invest more than twice their current monthly expenses. This is possible with a large total income and low expenses. They should ensure that lifestyle creep in future does not affect the investment schedule.

However, this should not come at the cost of reducing their wants today. They must find a balance between needs, wants and future goals and not deprive themselves of any pleasure – especially those that can only be enjoyed when young. If they are not able to invest the suggested amount, then we recommend not fretting about financial independence and investing whatever they can. They will still be on course to normal retirement.

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Pattabiraman editor freefincalDr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.
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