1. We can create our own monthly pension plan at any age, for meeting our expenses after 15 years.
2. Out of our available money, we can start contributing Rs. X to a monthly SIP in a Hybrid Aggressive Fund for 15 years.
3. After this period, our corpus in this fund will become Rs. 400X.
4. Thereafter, we can stop the SIP, and start drawing our monthly pension of Rs. 3X from it, through a monthly SWP, for the rest of our life.
5. In fact, our fund's corpus will also continue to grow during our survival years, which we can bequeath to our near and dear ones.
6. Once we achieve 25 times of our annual expenses corpus, irrespective of our age, we can successfully apply 4% annual withdrawal rule, to meet our monthly expenses during our entire lifetime, even at 6% long-term inflation.
7. The original rule says we can withdraw 4% of this corpus during the first year, and continue withdrawing the same amount, adjusted for inflation, each year after that forever.
8. The original assumptions are 7% min. CAGR and 3% max. inflation rate in the long-term, for a corpus comprising of 60% Equity products and 40% Debt products, and rebalanced every year.
9. In current economic context, we can consider the assumptions as 10% min. and 6% max. resp., to make this rule work for us.
10. If the 25x corpus is parked in a Hybrid Aggressive fund, it would suit 4% annual withdrawals better in the long-term, due to its auto-rebalancing mandate, in order to beat inflation and leave behind a healthy legacy too.
2. Out of our available money, we can start contributing Rs. X to a monthly SIP in a Hybrid Aggressive Fund for 15 years.
3. After this period, our corpus in this fund will become Rs. 400X.
4. Thereafter, we can stop the SIP, and start drawing our monthly pension of Rs. 3X from it, through a monthly SWP, for the rest of our life.
5. In fact, our fund's corpus will also continue to grow during our survival years, which we can bequeath to our near and dear ones.
6. Once we achieve 25 times of our annual expenses corpus, irrespective of our age, we can successfully apply 4% annual withdrawal rule, to meet our monthly expenses during our entire lifetime, even at 6% long-term inflation.
7. The original rule says we can withdraw 4% of this corpus during the first year, and continue withdrawing the same amount, adjusted for inflation, each year after that forever.
8. The original assumptions are 7% min. CAGR and 3% max. inflation rate in the long-term, for a corpus comprising of 60% Equity products and 40% Debt products, and rebalanced every year.
9. In current economic context, we can consider the assumptions as 10% min. and 6% max. resp., to make this rule work for us.
10. If the 25x corpus is parked in a Hybrid Aggressive fund, it would suit 4% annual withdrawals better in the long-term, due to its auto-rebalancing mandate, in order to beat inflation and leave behind a healthy legacy too.