If you are interested in achieving financial independence in retirement, especially if you hope to retire early, you’ve likely encountered the concept of the safe withdrawal rate, with the 4% rule being particularly well-known. However, it’s unfortunate that this rule is often misunderstood and misapplied, so it may not be a useful tool for retirement…

A reader asks, “Can I manage with not more than 20% equity mutual funds in my retirement portfolio as I fear the equity market?” Equity or equity mutual funds are certainly not necessary for retirement planning. See, for example: How I achieved financial independence without mutual funds or stocks or How to invest without using mutual…

A reader asks, “Can we include our own living property/house in total net worth? I had some discussions with friends about a particular case – where the total net worth will be significantly higher than the required retirement corpus if the living house/property is included”. “It’s an independent house in Chennai (NOT a flat!) And…

When most people use a retirement calculator for the first time, they are shocked to see the corpus required and the amount they need to invest. See, for example, the results of a retirement planning exercise. Then they assume there is no hope for them and a financially independent retirement is out of reach. That…

This article discusses a retirement plan for a 30-year-old who wishes to retire by age 50. We shall use the robo-advisory tool to create this retirement plan. Let us outline the inputs and assumptions employed in this analysis. Kindly note that all the inputs and outputs in this research pertain to a situation (of a…

This article explains how a retirement bucket strategy can be combined with an income ladder in various ways. The goal is to reduce the management risks associated with a bucket strategy. In an income ladder, we use fixed-income instruments that mature periodically in future, providing income to the retiree. Let us consider an example. Suppose…

A reader inquires, “As I approach my 50th birthday this year, I’m contemplating retirement. What steps should I take to determine the necessary retirement corpus for 2023? My yearly expenses amount to approximately Rs. 6.5 lakhs.” As mentioned in a recent article – I thought a pension was unnecessary, but age taught me a retirement planning…

Last year, while preparing a retirement planning illustration based on laddered annuities, we listed the annuity rates of LIC Jeevan Akshay – an immediate annuity plan. These are the revised and higher annuity rates applicable from Feb 28th 2023. Additional resources Use this annuity ladder calculator to plan for retirement with multiple pension streams How…

A reader says, “In many personal finance forums, I see comments like I have accumulated 25X or 30X for retirement. Many claim that 30X is when one becomes financially independent and even ready for early retirement (FIRE). Can you please write an article explaining what this 30X refers to and how it signifies financial independence?” What is…

A reader says, “I am a regular reader of freefincal. I am wondering whether I will be able to be financially independent in the next 20 years. My Background: I am 34 years old and working for an MNC. My wife is a homemaker; she is 31 years old. We have a three-year-old daughter”. Expense…

One quesion many readers ask is, if I already have a pension, how should I plan for retirement? A user of our robo advisory tool writes, “I am studying and trying to understand the robo advisory tool. In the income flooring sheet, annuity laddering and DIY Bucket, I found that annuity is needed to be purchased”….

With the deadline to opt for a higher EPS pension shifted to June 26, 2023, subscribers have some time to evaluate the decision. A reader with 15 years of service in a PSU wants to know if an EPS pension will benefit him. He estimates that he has to shift about 13.5 lakhs from EPF…

A reader says, “You mention in multiple articles such as – How much equity should I hold after retirement? – An equity allocation of not more than 30% for typical retirements is recommended.” “Can you write/update an article explaining if/how this 30% number would change based on someone’s current corpus (as a multiple of annual…

A reader says, ” Thank you for the Robo Advisory Tool. It has given me insight into my retirement plans. A query: As we can recall, monthly expenses during the year 2002 were approximately Rs.10,000/- p.m. In 2022, our expenses escalated to Rs.1,00,000/- p.m. (in 20 years)”. “The Retirement Corpus calculated in the year 2002…