Retiring with ₹2 crore? Your savings could run out in just 13 years — here's what an expert advises

₹2 crore for a retirement corpus sounds like a decent amount to start your second innings with. There are many financial thumb rules around managing your retirement corpus, and on paper, they may also appear workable. However, the biggest risk your corpus stares at is inflation. Sample this: if you spend ₹1 lakh a month today, at 6% inflation, your monthly expenses will rise to about ₹1.33 lakh after five years. That means five years later, your expenses will increase by over ₹4 lakh annually.

So, can a ₹2 crore retirement corpus really fund your retirement and give you the financial freedom you need? The answer depends on many factors, such as the retirement age, monthly expenses, the growth rate of your corpus, and, of course, inflation and medical expenses.

In this article, we take a look at how long your retirement corpus will last based on your expenses, inflation, and returns on invested corpus.

If your monthly expenses are ₹1.5 lakh, and your corpus grows at 8%, you’d run out of money in 12 years and 10 months. On a ₹2 crore corpus, withdrawing ₹1.5 lakh amounts to a withdrawal rate of 9%, which is 1 percentage point higher than the growth rate of the portfolio. Due to inflation and a higher withdrawal rate, the probability of running out of money in the early stages of post-retirement life is much higher in this scenario.

Inflation Rate: 6%
Source: Finnovate

Going by the same assumptions, if your monthly expense is ₹1 lakh, which is 8% return on the portfolio, your corpus would last a little longer – 20 years and 8 months. In this scenario, the withdrawal rate is 6%, which is 2 percentage points lower than the portfolio’s growth rate.

If your monthly expense is ₹75,000, and your investment continues to grow at 8% annually, your corpus will last 29 years and 9 months. This comes down to a withdrawal rate of 4.5%. This means the growth rate of your portfolio is 3.5 percentage points higher than the withdrawal rate, which is a good spot to be in.

Nirav Karkera, Head of Research and Fund Manager, W by Groww, suggests that a modest withdrawal rate is key. “What makes the money last is a sensible withdrawal rate. We believe drawing around 4 to 5 per cent of the corpus in the first year, roughly ₹8 to 10 lakh, and then raising it modestly with inflation, gives the corpus a very good chance of lasting through a long retirement. A balanced retirement portfolio can reasonably be expected to deliver around 8 to 9 per cent a year over the long run. That comfortably exceeds the withdrawal rate, so the corpus can keep growing even while it supports regular income.”

According to Karkera, a retiree’s portfolio should lean towards safety without giving up growth altogether, since retirement can easily last 25 to 30 years. “On the debt side, government-backed options such as the Senior Citizens’ Savings Scheme and RBI floating rate bonds offer assured, regular income, while short-duration debt funds, high-quality corporate bonds and bank deposits add stability and liquidity. For the emergency and near-term bucket, liquid funds or arbitrage funds work well. On the growth side, flexi-cap, multi-cap and balanced advantage funds give equity exposure with relatively lower volatility than aggressive categories. A small allocation to gold adds diversification,” Karkera told Livemint.

“As a broad guide, we believe around 55 to 60 per cent in debt and fixed-income options, 30 to 35 per cent in equity and hybrid funds, and 5 to 10 per cent in gold is a sensible balance for most retirees. Within this, one to two years of expenses should always stay in liquid form. The exact mix should be adjusted for age, other income such as pension or rent, and comfort with market movements. Adequate health insurance outside this corpus is equally important, so a medical expense never forces an untimely withdrawal from investments,” he added.

Devansh Sharma

Devansh Sharma is Deputy Editor at Mint (Digital), where he leads newsroom operations and helps shape the website's editorial strategy. With nearly 15 years of experience in business journalism, he specialises in business, personal finance, stock markets, mutual funds, and economic developments, while also covering geopolitics and major breaking news. During his tenure at Mint, which spans nearly two years, he has led planning and coverage of key news events, including the Union Budget, RBI monetary policy announcements, US Federal Reserve decisions, elections, and major international developments.<br><br> Devansh holds a Master's degree in Journalism & Mass Communication from the School of Communication Studies, Panjab University. Before rejoining Mint, he worked with leading business news organisations, including The Economic Times, Moneycontrol, and ET Money. At ET Money, he served as Senior Investor Educator, where he created educational content to help readers better understand investing, mutual funds, and personal finance. Throughout his career, he has focused on making complex business and financial developments accurate, accessible, and relevant for a broad audience.

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HomeMoneyPersonal Finance ₹2 crore retirement corpus: How long will it last once you stop earning? Here’s the maths

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