Goal-based corpus planning

Retirement corpus = (annual expense × longevity) ÷ withdrawal rate. Use real (inflation-adjusted) figures. Annual expense: today's monthly expense × 12 × inflation factor to retirement date. Longevity: assume 25-30 years post-retirement. Withdrawal rate: 4-5% of corpus annually is sustainable historically. Sequence-of-returns risk: bad early returns can deplete corpus faster than the math suggests.

Worked example: 35-year-old needs ₹50K/month today (₹6 lakh/year). Inflation 6% over 25 years → ₹26 lakh/year at age 60. Sustainable corpus at 4% withdrawal: ₹6.5 crore. SIP needed at 12%: ₹35K/month for 25 years. Sequence risk: if first 5 years post-retirement see negative returns, the 4% rule fails. Mitigations: bucket strategy (3-year cash buffer for early needs), partial annuitisation (locks in some inflation-impervious income), dynamic withdrawal (cut spending in down years). Most retirees underestimate longevity by 5-10 years — plan for the long tail.

A nuanced insight: the "safe withdrawal rate" debate. The classic 4% rule (Bengen 1994) is based on US data and assumes 50/50 stocks/bonds. Indian context with higher inflation, equity-heavier portfolios, and longer post-retirement lives may need a 3.5% rule. Conversely, partial annuitisation reduces sequence risk and allows higher withdrawal from the residual. Sophisticated planning involves Monte Carlo simulation across return scenarios to give the client a probability-of-success number, not a single corpus target.