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Retirement Readiness Wedge

The Retirement Readiness wedge answers: "Am I on track to retire at my target age, and what's my plan if I'm not?"

What you get

Corpus target: The total portfolio value you need at retirement to fund your expenses for the rest of your life. Computed using your expenses, inflation assumption, safe withdrawal rate, and life expectancy.

On-track status: Are your current assets + projected SIP contributions on track to reach the corpus target?

Age slider: Drag your target retirement age and see the corpus target change in real time. Retiring 5 years earlier dramatically increases the required corpus and decreases the SIP runway.

Stress tests: Three scenarios test your plan against adverse conditions:

  • Bear market scenario (lower returns for 5 years)
  • High inflation scenario (+2% inflation for a decade)
  • Longevity scenario (live 5 years longer than planned)

Monte Carlo simulation: 10,000 simulations with randomised annual returns drawn from a distribution centered on your expected return. Shows the probability of your corpus lasting through retirement.

Recovery paths: If you're behind, the engine computes three recovery strategies:

  • Increase SIP (how much more per month?)
  • Extend working years (how many more?)
  • Reduce target expenses (by how much?)

Corpus formula

Target corpus = (annual_expenses_at_retirement × inflation_factor) / SWR

Where:

  • inflation_factor = (1 + inflation)^years_to_retirement
  • SWR = Safe Withdrawal Rate, default 3.5% (conservative Indian context)

A 3.5% SWR means your corpus needs to be ~28.6× your first-year retirement expenses (in future nominal terms).

Why 3.5% SWR for India

The standard US FIRE community uses 4% (25× rule). India's context differs:

  • Higher healthcare inflation (10–12%): Medical costs grow much faster than CPI
  • Weaker social safety net: No Medicare or Social Security equivalent
  • Tax-inefficient mature portfolio: At retirement, you're drawing down equity and paying LTCG

A 3.5% SWR (28.6× corpus) provides a larger buffer for these India-specific risks. The platform's AI commentary explains this when it presents your results.

Monte Carlo interpretation

The simulation shows you the probability of your corpus surviving to your life expectancy. A 90%+ survival rate is generally considered "safe." 85% is acceptable if you have flexibility on expenses. Below 80%, the plan needs adjustment.

If your current plan shows 70% Monte Carlo probability, the Recovery Paths section shows exactly which changes bring you to 90%.