4% Rule & Safe Withdrawal Strategy (India)
Design withdrawals that last through retirement. Manage sequence risk with buckets and SWP.
SWRBucket strategySequence risk
What is the 4% Rule?
The 4% Rule is a retirement withdrawal guideline: withdraw 4% of your total corpus in the first year, then increase that rupee amount each year by inflation. With a balanced portfolio, this aims to make your money last about 30 years.
Example
If your retirement corpus is ₹2 crore, 4% = ₹8 lakh in year 1. Next year, adjust that ₹8 lakh for inflation (you don’t recalc 4% again).
Key Assumptions
- Stay invested (e.g., ~50–60% equity; rest in bonds/cash).
- Long-term markets deliver positive real (inflation-adjusted) returns.
- Withdraw annually even during market declines.
- Designed for a ~30-year retirement horizon.
Why It Matters
- Helps size your target retirement corpus.
- Gives a simple, “safe” withdrawal benchmark.
- Great as a quick thumb rule without complex math.
Bucket Strategy
- Bucket 1: 12–24 months expenses in cash/ultra-short debt
- Bucket 2: 3–5 years in high-quality debt
- Bucket 3: Long-term growth in equity
Longevity / SWP Estimator
Education only; not investment advice. Assumptions are illustrative and can change with markets and regulation.