Retirement may last thirty years or more. Planning for it means knowing what you will have, what you will need, and how to make it last.
The usual building blocks
- EPF (Employees’ Provident Fund): for salaried employees; you and your employer both contribute, and the interest rate is declared each year by the EPFO.
- PPF (Public Provident Fund): a government-backed savings account with a 15-year term, which can be extended; its interest rate is set by the government each quarter.
- NPS (National Pension System): a market-linked pension account regulated by PFRDA. At retirement, part of the money generally has to buy an annuity (a regular pension); the exact rules are set by PFRDA and have changed over time.
- Fixed deposits and the Senior Citizens’ Savings Scheme: steady income with little risk, but the interest is taxable and may not keep up with inflation.
- Mutual funds and shares: more ups and downs, but over long periods they have usually grown faster than inflation.
Rates, limits and tax rules for all of these change. Check the current figures on the official sites (EPFO, the National Savings Institute, PFRDA, your bank) before deciding.
Inflation: the quiet risk
At 6% inflation, prices roughly double every twelve years (divide 72 by the inflation rate for a rough estimate). An expense of ₹50,000 a month today could be about ₹1 lakh a month in twelve years. A plan that ignores this can look comfortable on paper and fall short in real life.
Making withdrawals last
Many planners suggest starting withdrawals at a modest share of the total each year, often 3–4%, and adjusting later. That rule of thumb comes from studies of other markets and isn’t a guarantee. Keeping a few years of expenses in safe instruments, and the rest invested for growth, helps avoid selling investments after a fall.
How i-wise helps
The retirement planner adds up what you will have from each source, including pensions and loans, and the SWP calculator shows how long a regular withdrawal can last. See retirement planning.
General information for education, not investment, tax or financial advice. Rules, rates and limits change: check the official sources before acting, and consider a SEBI-registered investment adviser for advice on your own situation.