What FI corpus is needed for ₹80K monthly expenses using 4% safe withdrawal rate?
Scenario
Suresh, age 40, business analyst in Bengaluru, ₹22 lakh annual income, supporting wife + 2 kids + parents, ₹1 lakh monthly expenses
Inputs
- Inflation %
- 6
- Retirement years
- 30
- Annual expenses INR
- 9,60,000
- Safe withdrawal rate %
- 4
Calculation
- 1.
Annual expense (₹/year)
Monthly expense × 12 → ₹9.60 L
- 2.
FI corpus (₹/year ÷ SWR)
₹9,60,000 ÷ 0.04 → ₹2.40 Cr
- 3.
Multiplier (corpus ÷ annual expense)
1 ÷ 0.04 → 25x
- 4.
Real (today-rupees) corpus needed at retirement age (assuming 30-year retirement)
Same — SWR formula uses today's rupees → ₹2.40 Cr
Conclusion
₹80K/month requires ₹2.40Cr corpus at 4% SWR — the 25× rule that drives Indian FIRE planning.
Tradeoffs
4% SWR has ~90% historical survival probability for 30-year retirement. Lower SWR (3%) is safer but requires bigger corpus; higher (5%) risks depletion. Sequence-of-returns risk in years 1-5 dominates outcome more than long-term average return.