While preparing a slide deck for a talk at the Reserve Bank Staff College, I made a bespoke retirement calculator that factors in an indexed pension. Here is how that makes a huge difference to a retirement plan. An indexed pension increases each year at a set rate or inflation rate. This is known as dearness…

In a recent talk, a person nearing retirement asked me to explain the differences between RBI Retail Direct Bonds and RBI Floating Rate Bonds. RBI Floating Rate Bonds have a seven-year duration and a variable interest rate reset every six months. Its return is fixed at the prevailing NSC rate plus 0.35%. It provides interest…

We discuss the instruments that can be used to create a retirement bucket strategy. A bucket strategy is a post-retirement investment plan to manage inflation-protected withdrawals (income) and investments for the near and long term. So, we have investments purely for income generation (regular withdrawal), fixed income, and equity investments. Retirement buckets are mental partitions…

A reader says, “I’ve read articles on your freefincal website about early retirement, corpus needed, and asset allocation needed. I wish to request you to have a similar study for the case below”. “My wife and I work in the IT industry. Our age is 30 years. Combined, we earn 4L per month. We expect…

A reader who wishes to be anonymous asks, Hello, I was avidly reading about your answer to a 30-some reader. It was surprising that you need an 8+ crores rupee to sustain a lifestyle with 40000+ monthly expenses. And I am very worried (despite living in my own house-fully paid up, owning another property worth…

A 35-year-old individual is inquiring whether it is feasible to retire comfortably by age 55 and the steps necessary to accomplish this goal. He is married to a 30-year-old homemaker. When he reaches 55, his wife will be 50. So, we shall plan for retirement income until she (the younger spouse) reaches 90. Therefore, he…

We discuss the role of income laddering (annuity laddering) in retirement planning and how to implement it. There are two extreme options in retirement planning: one where the corpus is managed in a diversified portfolio, and an increasing income is withdrawn from it as required. This is known as the bucket strategy.  We had earlier…

We discuss how retirement products like the employee provident fund (EPF), the National Pension Scheme (NPS) and the Unified Pension Scheme (UPS) can be incorporated into a retirement plan. Over the years, many readers have doubts about how to go about this, hence this article. At the time of writing, the UPS is not yet…

A reader says, “I am 50 years old and have been planning to retire at this age since quite a few years back. By god’s grace and my regular investments, I have managed to have a decent corpus, which I have validated using your robo-advisory tool. Thanks a lot for making this tool and helping…

A reader asks, “How can we be sure that post-retirement, our bucket strategy will help us to sustain the corpus in our retirement period with an assumed return of different asset classes and beat inflation?” While there are no guarantees, we can do enough to ensure we have more than a reasonable chance of success….

In response to our article, Ten mistakes to avoid while planning for early retirement, a reader asks, ” Very helpful. I have a question for you regarding point 1. I want to be productive after retirement, which is 7 years from today. So, how do I go about doing that?”  This is point 1 from the…

A reader says, “Was going through your article on “Should I withdraw from PPF to increase my Equity allocation”. I am in exactly the opposite situation. I am 51 and want to retire now. My Equity allocation is 58%, and my Debt is 42%. Should I sell my equity and move to Debt to maintain…

A reader says, “I am a senior citizen and an investment banking professional with over three decades in the Middle East. As an NRI, who would return to India”. “The facts: Am a senior citizen , aged 63, with self owned debt free houses. Will live in one of them. A retired life for a…

A reader (age: 41, spouse, 36, wants to retire asap) wants to know, “What should be my retirement corpus if my current monthly expenses are Rs 1 lakh?” We shall use the freefincal Robo Advisor tool to consider some scenarios. 1. Current monthly expenses that will persist in retirement: Rs. 1,00,000. We can exclude expenses…

A retirement bucket strategy is an approach by which the retirement corpus is split into 3-4 buckets of varying risk. As retirement progresses and market conditions change, the retiree is expected to manage the buckets. That is, transfer money from one bucket to another to ensure the expenses (indexed to inflation, with some room for…