Can I retire at 40 with one crore in India? Early retirement feasibility check

Can I retire at 40 with one crore in India? Is it possible to retire early in India with just one crore? Since the answer is not a simple “yes” or “no” let us do an early retirement feasibility check with some reasonable and close to reality assumptions. First, it is important to understand what early retirement means and what it is not. SInce there are many misconceptions about FIRE – financial independence, retire early, I would strongly suggest that you check out this video first.

Assumptions for a 40-year-old with one crore wanting to retire early in India

Can I retire at 40 with one crore in India? Early retirement feasibility check

Not every 40-year-old can retire early. So we will have to define our universe and make several assumptions. The feasibility of the plan entirely depends on these assumptions. So utmost care is necessary. For a more thorough feasibility check please use the fornical Robo Advisory Software Template.

Warning: This article has several projections based on assumptions which can often be far removed from reality. So no part of this article should be considered as investment advice. It is meant to educational to a potential early retiree. I shall take no responsibility for your gains or losses arising from adapting this or any other approach discussed here. Be sure to read the limitations section below.

  1. The person is unmarried or married without kids (with no plans to become parents). Unless there is there is a separate corpus to provide for their needs, it is not possible to retire early with kids in India with just one crore. No need to compute that!
  2. We shall assume that the spouse or partner does not work.
  3. There is no separate emergency fund
  4. Health insurance for Rs. 25 lakh is available and the premium at 40 is Rs. 15,000 for a single person and Rs, 25,000 for the couple (floater, both aged 40). The health insurance premium increases every 5 years by 10%
  5. Current annual  expenses are Rs. 2.5 Lakh year (20K a month) for one person and Rs. 30K for two. This is assumed to increase at 6% inflation year on year.
  6. Forty lakh is put in fixed income that returns 6% a year (post-tax). The rest in equity with a 10% post-tax return assumption. As pointed out earlier: if we want to be financially free, we should not count on frugality, but worry about sequence of returns risk! So instead of a constant 10% return, testing with variable return testing is mandatory but we do not have enough history for this. We shall however consider one example.
  7. From the six year onwards, we shift 10% of equity corpus  to fixed income.

Case 1: Age 40, single: early retirement feasibility check

This table illustrates how the above assumptions play out year on year. I shall explain how to create this table in a video. The number under “how long will the money last?” column is calculated as: total corpus (year end) divided by expected annual expensed in the next year. When this number falls below one, income withdrawals are not possible. The idea is to ensure that this number fall below one at least after age 85 (of the younger spouse/partner).

For Rs. 20,000 monthly expenses and 15,000 health insurance and above assumptions the corpus can last up to age 95-96 which is decent. Scroll down the table to see pictorial representation.


AgeTotal expensesFixed Income corpus year endEquity corpus year endHow long will the money last?
40   2,55,000     39,69,700    66,00,000           39.23
41   2,69,400     39,22,318    72,60,000           39.28
42   2,84,664     38,55,913    79,86,000           39.36
43   3,00,844     37,68,374    87,84,600           39.48
44   3,17,994     45,88,569    86,96,754           39.34
45   3,37,674     54,27,805    86,09,786           39.33
46   3,56,945     62,87,749    85,23,689           39.25
47   3,77,371     71,68,512    84,38,452           39.11
48   3,99,024     80,70,133    83,54,067           38.92
49   4,21,975     89,92,579    82,70,527           38.54
50   4,47,953     99,33,979    81,87,821           38.25
51   4,73,742  1,08,95,761    81,05,943           37.92
52   5,01,077  1,18,77,594    80,24,884           37.55
53   5,30,053  1,28,79,032    79,44,635           37.13
54   5,60,767  1,38,99,492    78,65,188           36.57
55   5,95,139  1,49,36,324    77,86,537           36.09
56   6,29,649  1,59,90,448    77,08,671           35.57
57   6,66,230  1,70,60,790    76,31,584           35.02
58   7,05,006  1,81,46,078    75,55,269           34.45
59   7,46,109  1,92,44,826    74,79,716           33.76
60   7,91,674  2,03,53,191    74,04,919           33.13
61   8,37,857  2,14,71,176    73,30,870           32.48
62   8,86,810  2,25,96,500    72,57,561           31.80
63   9,38,701  2,37,26,568    71,84,985           31.11
64   9,93,706  2,48,58,442    71,13,135           30.33
65 10,54,207  2,59,86,482    70,42,004           29.60
66 11,16,010  2,71,09,153    69,71,584           28.84
67 11,81,521  2,82,22,278    69,01,868           28.08
68 12,50,962  2,93,21,193    68,32,850           27.29
69 13,24,571  3,04,00,701    67,64,521           26.45
70 14,05,011  3,14,52,471    66,96,876           25.64
71 14,87,718  3,24,72,507    66,29,907           24.82
72 15,75,386  3,34,53,718    65,63,608           23.99
73 16,68,315  3,43,88,270    64,97,972           23.14
74 17,66,819  3,52,67,522    64,32,992           22.25
75 18,73,892  3,60,79,146    63,68,662           21.39
76 19,84,571  3,68,15,327    63,04,976           20.51
77 21,01,892  3,74,64,569    62,41,926           19.63
78 22,26,251  3,80,14,261    61,79,507           18.74
79 23,58,073  3,84,50,587    61,17,712           17.82
80 25,00,726  3,87,55,330    60,56,534           16.92
81 26,48,840  3,89,14,872    59,95,969           16.01
82 28,05,842  3,89,11,145    59,36,009           15.09
83 29,72,263  3,87,24,432    58,76,649           14.17
84 31,48,669  3,83,33,233    58,17,883           13.22
85 33,38,876  3,77,10,714    57,59,704           12.29
86 35,37,086  3,68,34,574    57,02,107           11.35
87 37,47,189  3,56,77,051    56,45,086           10.41
88 39,69,898  3,42,07,961    55,88,635             9.46
89 42,05,970  3,23,94,506    55,32,749             8.50
90 44,59,743  3,01,97,320    54,77,421             7.55
91 47,24,993  2,75,81,273    54,22,647             6.59
92 50,06,159  2,45,04,421    53,68,421             5.63
93 53,04,194  2,09,21,294    53,14,736             4.67
94 56,20,111  1,67,82,616    52,61,589             3.70
95 59,58,874  1,20,30,895    52,08,973             2.73
96 63,13,839     66,12,231    51,56,883             1.76
97 66,90,101       4,64,087    51,05,314             0.79
98 70,88,939–    64,81,180    50,54,261           -0.19
99 75,11,708– 1,42,96,710    50,03,719           -1.17
100 79,64,122– 2,30,66,087    49,53,682#DIV/0!

Early retirement at 40 in India. Results for single person with 20,000 monthly expenses and Rs. 15,000 health insurance

Can a single person retire at 40 in India with one crore?

Answer: Possible; Probable; However needs tremendous luck (see limitations below)

Case 2: Age 40, Couple (no kids): early retirement feasibility check

Monthly expenses: 25,000. Health insurance premium (annual): Rs. 25,000. All other assumptions as above.

Early retirement at 40 in India. Results for couple with no kids and 25,000 monthly expenses and Rs. 25,000 health insurance

Can a couple person retire at 40 in India with one crore?

Answer: With 25K monthly expenses (+ health insurance costs) the money will last until 84. So it would be a huge risk (see limitations below)

Monthly expenses: 30,000. Health insurance premium (annual): Rs. 25,000. All other assumptions as above. The money will last only until age76.

How would a couple need to retire at 40 in India?

At least 1.5 Crores.

What are the limitations of this study?

Let us go over each of the assumptions

  1. Monthly expense reasonable but sudden jumps in expenses due to sickness is not considered.
  2. Lifestyle creep is not considered
  3. Inflation assumption of 6% for current expenses is “ok”, but 8% is better.
  4. Fixed income post tax return of 6% is just about possible
  5. Equity post tax return of 10% is just about possible. However unlike when investing for retirement, this number has little relevance as sequence of returns has to be considered as done here: Want to be financially free?  Worry about sequence of returns risk!
  6. Health insurance costs could suddenly shoot up because of changes in company policy
  7. 10% transfer from equity to fixed income is possible and necessary but is it practical?
  8. No emergency corpus is accounted for. Reimbursement health claims can get in trouble otherwise (one can make do with a credit card to some extent). At least 15-20 lakh emergency corpus would be better.
  9. Anything else? Please leave a comment.

Factoring in the sequence of returns

We have assumed equity return each year is a nice 10%. This is how returns would fluctuate in reality.

Early retirement sequence returns risk

Early retirement sequence returns risk for Sensex

The problem is that there are only 39 data points. This means I can test only one sequence of returns. I will need to test at least 100s of sequence of returns for which we do not have data.

Even for this one favourable sequence of return (where above results are not altered much), the equity corpus can fluctuate this much. How many early retirees can stomach? How many of them have such an experience?

equity corpus fluctuations in early retirement corpus when sequence of returns are included

So I would recommend a higher corpus so that you can live off your fixed income assest for at least 15 years while equity recovers. Use the Key features of the freefincal robo advisory software template to stress test your retirement plan. Do not be in a hurry to quit with just one crore.

What is FIRE: Financial Independence, Retire Early

More videos from freefincal on YouTube

Subscribe and join the freefincal Youtube community!

 Don't like ads but want to support the site? Subscribe to the ad-free newsletter! 
You will get the full post-ad-free delivered to your inbox for Rs. 3000 a year. Follow this link to read the terms and sign up! 
Want to conduct a sales-free "basics of money management" session in your office?
I conduct free seminars to employees or societies. Only the very basics and getting-started steps are discussed (no scary math):For example: How to define financial goals, how to save tax with a clear goal in mind; How to use a credit card for maximum benefit; When to buy a house; How to start investing; where to invest; how to invest for and after retirement etc. depending on the audience. If you are interested, you can contact me: freefincal [at] Gmail [dot] com. I can do the talk via conferencing software, so there is no cost for your company. If you want me to travel, you need to cover my airfare (I live in Chennai)

Connect with us on social media

Do check out my books

You Can Be Rich Too with Goal-Based InvestingYou can be rich too with goal based investing

My first book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create customg solutions for your lifestye!Get it now.  It is also available in Kindle format.

Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want

Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you want My second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a youngearner

The ultimate guide to travel by Pranav Surya

Travel-Training-Kit-Cover This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step.  Get the pdf for ₹199 (instant download)

Create a "from start to finish" financial plan with this free robo advisory software template

Free Apps for your Android Phone

All calculators from our book, “You can be Rich Too” are now available on Google Play!
Install Financial Freedom App! (Google Play Store)
Install Freefincal Retirement Planner App! (Google Play Store)
Find out if you have enough to say "FU" to your employer (Google Play Store)

About Freefincal

Freefincal has open-source, comprehensive Excel spreadsheets, tools, analysis and unbiased, conflict of interest-free commentary on different aspects of personal finance and investing. If you find the content useful, please consider supporting us by (1) sharing our articles and (2) disabling ad-blockers for our site if you are using one. We do not accept sponsored posts, links or guest posts request from content writers and agencies.

Blog Comment Policy

Your thoughts are vital to the health of this blog and are the driving force behind the analysis and calculators that you see here. We welcome criticism and differing opinions. I will do my very best to respond to all comments asap. Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete the entire comment or remove the links before approving them.
Updated: March 8, 2019 — 2:28 pm

The Author

M. Pattabiraman

This article is authored by M. Pattabiraman. He is the co-author of two books: You can be rich too with goal based investing and Gamechanger. He is a patron and co-founder of "Fee-only India" an organisation to promote unbiased, commission-free investment advice “Pattu” as he is popularly known, publishes research, analysis and holistic money management advice at which serves more than one million readers a year. has more than a 100 free calculators on different aspects of insurance and investment analysis, including a robo advisory template for use by beginners.


Add a Comment
  1. Hi Pattu,

    Dsp index funds have a 0% expense ratio. Can you check and do a post ?


  2. Dear Sir,

    They say Equity is a best investment option for long term. What would happen if i invest a lumpsum of Rs 40 lakhs in Equity mutual fund today for the next 10 years, with the Nifty PE ratio over 26. Can I expect a CAGR of at least 12% to 15% for this term. Any backtesting data on this. Thanks

  3. Thank you for detailed explanation as always! It restores my faith that I can be financially free soon.

  4. Hi Patti,

    What is your take on absli vision life income plan and licking Jeevan Shanti as regular income plan

    1. I do not see why they are needed

Leave a Reply

Your email address will not be published. Required fields are marked *