A reader says, ” I have used the freefincal robo advisor tool to create my financial plan. You have an option to include one or more annuities or pension plans. I was wondering, why do that? Would it not be more tax-efficient to have a simple bucket strategy without any pension product or bond interest?”…

We received this message via our contact form: “Can I retire with a corpus of Rs. 3 Crores?” How could I reply yes or no when there is no other information? Rs. 3 crores could be anywhere between ample, to a grey area, to inadequate. It all depends on the lifestyle of the retiree and…

A reader says, “I am investing next month with a corpus of Rs. 6 Crores. Please guide me on how to invest this for a peaceful retirement. My wife and I are both 55 years old. Our annual expenses are Rs. 12 lakhs (including Rs. 25 lakh health insurance cover).” We shall punch this scenario…

This article addresses frequently asked questions about early retirement and the FIRE (Financial Independence, Retire Early) movement. 1 What is the definition of financial independence? When a person has enough income from her investments or net worth to not only replace existing gainful employment but also combat inflation in essential expenses and lifestyle changes for…

We discuss a counterintuitive idea in retirement planning. The sooner you retire, the lower the retirement corpus necessary for financial freedom! But where is the catch? Let us consider a 30-year-old who wishes to plan for retirement. Let us call him Dagwood (a comic character created by cartoonist Chic Young).  He wants to decide the…

A reader says, “I was recently introduced to freefincal by a colleague. I am 48 and did not plan anything for my retirement. After reading your articles and understanding how important retirement planning is, I feel like a failure.  What can I do? Is there any hope left for me?” Please don’t despair. The past is…

A reader says, “Dear Pattu Sir, I am 28 and wish to retire by 50. What is the retirement corpus I require?” We shall compute this using the freefincal robo advisory tool with the following modifications (remaining assumptions stay the same): Monthly expenses Rs. 50,000; The current corpus is practically zero Post-tax return expected from…

A reader asks, “What Is the Safe Spending Limit for a ₹1 Crore Retirement Corpus?” In other words, if my retirement corpus is Rs. one Crore, what should be the maximum (initial) expenses so that I can draw an inflation-indexed income? Naturally, there is no universal answer as it depends on years in retirement, inflation…

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…

Jijesh has designed a comprehensive retirement planning tool for aspiring and early retirees. He describes its key features in this article. Please note: Freefincal is not associated with this tool in any way. It is published because we strongly believe that DIY investors’ efforts to help the community should be promoted.  Please exercise due diligence…

“I don’t even care about becoming rich anymore. I just want an exit.” Over the last few months, I’ve heard versions of this sentence repeatedly from salaried professionals. Not people who hate work. People who are simply exhausted by the environment around work and the growing uncertainty of it all. About the author: Sneha Rege…

Here is how you can review your retirement portfolio. 1. What is the retirement corpus worth today? If you retire today, how many years can you be financially independent? If this number equals the years you expect to be alive from today, you are financially independent! For example, suppose I can be financially independent without…

A reader asks, “Sir, what return should I use while planning for retirement? I wish to retire by age 55. I am currently 35”. Many people make two mistakes while planning their finances. The first common mistake is presuming that equity mutual funds provide a 12%  (or more!) return and utilising that figure to calculate…

DIY investors often ask us, “What withdrawal rate do you recommend for retirement planning?” — a discussion. The withdrawal rate is defined as the annual expenses in (the first year of) retirement divided by the corpus. Typically, this is estimated before or at retirement and is known as a “Safe withdrawal rate” (SWR). Backtesting is…

A reader asks, “Sir, you have shown in many articles that the freefincal robo advisor tool uses a four-bucket strategy. Can I DIY a three-bucket strategy using the tool?” Short answer: Yes, you can, but we do not recommend it. Those who wish to start with the basics head over here: What is a retirement bucket…