What does the term “safe withdrawal rate” mean in retirement planning? The safe withdrawal rate, or SWR, refers to the amount of money that can be withdrawn annually from a retirement fund in the first year of retirement. This rate is calculated by dividing the initial withdrawal amount by the total money available for retirement….
Continue reading →For a long term goal, invest about 60% in equity and the rest in fixed income. Three years before the goal deadline, start reducing equity allocation. This is the usual advice peddled around by “experts”. How successful is this idea against a rigorous backtest? As you might guess, this is just arbitrary gyan, and if…
Continue reading →A reader says, “I was planning to retire in early 2025. The markets in the last few years have been good to us all, and I was confident about retiring early (I am 45). But now, I am not so sure. I have used your robo-advisor tool for the last four years and, with its…
Continue reading →I have been making retirement calculators for 14 years, which are some lessons I learned. My first calculator was made around 2010 or so. I shared it with PV Subramanyam (Subra of subramoney.com) for feedback. Like everyone else using a retirement calculator for the first time, I, too, was scared to see the corpus I…
Continue reading →A reader says, ” I am a salaried IT professional, but I have only started planning for retirement very late. I am investing very strongly (35% into investment, 30% into EMI), but I fear I might not have a safe retirement – and am too late. I want to keep my expenses the same after…
Continue reading →A reader asks, “I would like to go abroad on holiday once in two years. How do I plan for this without affecting my other long-term investments?”. Our robo-advisor tool has a recurring financial goal calculator module, which you can use to plan for all such goals. This can also be used to plan annual…
Continue reading →This article compares my stock portfolio with an equivalent investment in a Nifty index fund and the Nifty 100 Low Volatility 30 TR index. We post this comparison each month. Before we begin, new readers need to appreciate the context of these investments. Update: We recently added a new tool to the freefincal investor circle…
Continue reading →We find out what percentage of our income we pay as tax in the new tax regime. Take, for example, a salaried tax-payer with an income of Rs. 11 Lakhs. After accounting for the standard deduction of Rs. 75,000, the net taxable income is Rs. 10.25 Lakhs. We will not consider any other deductions (like…
Continue reading →My Name is Sunil, age 50, achieved financial freedom at 45 & here is my story. An interesting point to note is that I had Average grades in Academics, Average Income, Worked for 25 yr in Manufacturing Companies, NO OVERSEAS Assignment, and NO ESOP & still did very well on Financial with DISCIPLINE, CONSISTENCY, &…
Continue reading →This is a debt mutual fund screener for portfolio selection, tracking, and learning. It also includes hybrid funds that invest in bonds. It will satisfy investors who wish to invest in money market funds, banking PSU funds, etc. The credit quality of the bonds in the portfolio and the bond maturity profile can be tracked….
Continue reading →A reader says, ” I am 35 years old, and I started my “equity” investments quite late (around 2021 when I was 33). Until then, debt instruments and real estate have been my primary investments for my retirement. So debt in my retirement portfolio has a major weightage at about 70%.” “I would like to…
Continue reading →A reader asks, ” What should I consider as the average inflation rate for the next 25 years? RBI indicates an average of 4% but in a band of 2% to 6%.” Assuming this is the inflation estimate before retirement, there are some considerations. 1. The inflation estimate is not set in stone. It is…
Continue reading →If we consider any argument involving money managment, personal finance, investing, insurance, etc., there is something common among the two or more opposing ideas/sides. Each side thinks their choice is the best. Each side is pretty smug about their decisions. Unfortunately, this is rather immature, and we need to do better. Take, for example, the…
Continue reading →This ETF screener is based on tracking errors and tracking differences (ETF return minus index return). The screener will help users evaluate how efficiently an ETF has tracked its underlying benchmark. The tracking error is the ETF’s standard deviation minus index monthly return differences. The lower the tracking error, the more efficient the ETF is…
Continue reading →A reader wants to know how a term insurance payout should be invested for the family’s welfare upon his demise. As is well known, a term insurance plan only pays out on the insured’s death (usually a breadwinner). First, we (the insured) must ensure that the (bereaved) family typically does not need to dip into…
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