How much of your retirement money is actually yours?

Ravi Sinha is 51. This March, he spent six days outside an ICU in Gurugram while his mother recovered from a cardiac procedure. The bill came to Rs 14 lakh. Insurance paid Rs 6 lakh. The other Rs 8 lakh came from the same mutual funds that Ravi had spent 10 years thinking of as his retirement money.

Have the same emergency happen to someone in Europe or the UK, and it barely makes a dent. Different health systems, different assumptions, and mostly, a retiree who only has to answer for himself. In India, it goes straight for the corpus.

Your retirement corpus is the total amount you set aside for old age. Eight months ago, we told you how fast you could safely spend it. We left out one question. In most Indian families, a good part of that sum is already promised to someone else, long before retirement day. Ravi’s mother’s medicines used to be a one-time expense. Now they are an ongoing one. The MBA his daughter wants to do costs Rs 30 lakh over two years. Neither was on his spreadsheet, and both are happening.

Say you retire at 60, like Ravi, with Rs 3.5 crore, and your household spends Rs 1 lakh a month. That is 350 times your monthly expenses. We recommended that multiple in December. Draw 6 per cent a year, and our table said the money would see you through 35 years.

The table is not about whether your corpus survives 35 years. It tells you how many of those 35 years you would fall short: years when what you can safely withdraw is less than what you actually need because your expenses would have grown with inflation and your withdrawal would not have kept pace. At 350 times your expenses, drawing 6 per cent, that is just four years. 

Now assume Rs 1.1 crore of that Rs 3.5 crore is already set aside for commitments made before you stopped working. Your daughter’s wedding. Your mother’s care at home. The balance owed on a flat bought in your son’s name. Take those away, and Rs 2.4 crore is left: 240 times your monthly expenses, not 350. At 240, the same methodology says you fall short for 23 of your 35 retired years, not four.

You passed our test with a number that was never yours.

December’s arithmetic still holds. The number we ran it on did not. An Indian retiree has one question to answer before any other: how much of this money have you already promised away?

So this issue makes three corrections. The base: what your multiple becomes once you take out the committed money. The shock: what one hospital bill does to a plan that looked funded. The horizon: why 35 years could be the wrong number for you.

The audit nobody runs

Ask an Indian investor aged 58 what his retirement corpus is, and he will give you a single figure. EPF, PPF, the equity funds, the fixed deposits, whatever he counts from property, all added up. One number. He thinks the whole of it is his.

In this country, a large share of the retirement corpus rarely belongs to the one who toiled to save it. Some claims are written down: a home loan that runs past your retirement date, a loan against property to set up a family member’s business. Most are not, and in an Indian family, an unwritten promise gets collected as reliably as a bank’s. A child’s wedding. A parent who needs someone at home full time, or a room in a facility.

The correction itself is one line of arithmetic. Work out what share of your corpus is already promised away. Whatever is left over funds your own expenses, so it needs a higher multiple to do the job 350 was meant to do.

The multiple you need on your stated figure is 350 divided by one minus the committed share. Put a fifth of your corpus out of reach, and your target is no longer 350 times your monthly expenses. It is 438 times.

The correction rises faster than the commitment does. Go from nothing committed to a fifth committed, and your multiple climbs by 88. Going from a fifth to two-fifths adds another 200x. Guess your way through this audit, and you may be more mistaken than you realise.

Some of you ran our December numbers and felt reassured. If the figure you ran them on already included money you had promised away, that reassurance was not worth much. Redo the subtraction, then apply the same rule to what is left. The rule is fine. The number you fed it was not.

The question comes from Suraj Kaeley’s The Desi Retirement Plan. His preparedness scorecard asks it in two parts: whether you have an honest picture of everyone who depends on you, and what you have already committed for your retirement.

The inevitable bill

Every simulation we ran in December assumed a clean run: 30 years of withdrawals with nothing interrupting them. But few Indian retirements run clean.

One cardiac admission, or a single course of cancer treatment in a metro private hospital, can cost Rs 5 lakh to Rs 25 lakh. While insurance may meet part of it, the rest comes out of your corpus, in a lump, on a date you did not choose.

Here is the part that surprises people. If you hold to a safe withdrawal rule, the bill does not empty your final corpus. Instead, it shrinks your income for years.

Take two identical retirees who face the same Rs 15 lakh bill. One is billed in year three, the other in year 15. Everything else is identical, and both keep to the 6 per cent rule so the money lasts. Neither runs out. But look at what each gets to withdraw each year.

The retiree hit in year three draws less almost every year for the rest of retirement. Six per cent of a corpus that an early bill shrank is a smaller income. Early withdrawal also costs more years of compounding, so the corpus stays smaller for longer. The gap is widest in the years just after the bill and closes only near the end.

So the rule works, in the narrow sense: neither retiree runs out of money. It simply makes the earlier one live on less, for longer. The cost of a bill you cannot time may not always be a corpus that collapses. It can be the standard of living that never fully recovers, and the earlier the bill lands, the more years you spend below it.

Since you can’t choose when the bill comes, the aim is not to brace the retirement corpus for it, but to keep the bill off that corpus altogether. Kaeley’s answer comes in three layers.

First, a comprehensive health policy with a top-up above it, to meet the bill itself. Second, a medical corpus kept separate from your retirement corpus, invested for stability with a little growth. Third, a standing credit line or a high-limit card.

The third layer is the one people misread. It is not there to foot the bill. The credit line buys you two to four weeks, enough time to release the medical corpus in an orderly way, instead of selling equity into whatever the market is doing that fortnight. Think of the third week of March 2020, when forced sales meant a permanent loss; a credit line would have carried that bill to May.

Set up this way, the bill lands on money kept for it, and neither the retirement corpus nor the income it pays you takes the blow. That is the point: protect the retirement corpus by keeping the bill off it altogether.

The right number of years

Thirty-five years of retirement is an easy rule of thumb but it’s not the same for everyone, and nobody knows their own number. Life expectancy shifts with your state, whether you live in a city or a village, your sex, your health and how you live. And the longer you have already lived, the longer you are expected to live still, so the average life quoted at birth understates the horizon a 60-year-old faces.

You cannot know your exact number, but you can see which group you fall in and plan for at least its average. That gives you a floor to work with.

Women in India have a higher life expectancy than men by about 2.3 years at age 60. So a woman retiring at 60 is planning a slightly longer retirement than a man the same age. There is a second problem. Women are far more likely to have stepped out of paid work to raise children or care for a parent during the best-earning stretch of their careers. So, they end up needing more money built from fewer years of income.

So if you are a woman sizing your own retirement, use a slightly higher multiple than a man would. If you and your husband are sizing a joint corpus, size it on the longer of your two lives, not on an average.

What still holds

Three findings from December remain unchanged and still determine most retirements.

Keep your annual withdrawal under 6 per cent of your portfolio. On Rs 1 crore in a balanced 50-50 portfolio, withdrawing 5 per cent a year leaves about Rs 4.7 crore after 35 years; 10 per cent leaves Rs 70 lakh, or nothing, depending on when the bad years fall. Less in your sixties means more in your eighties, every year.

Hold a real equity share. Among retirees with long enough records to judge, the all-debt portfolio that felt safest produced the most years with discomfort. Debt did not protect them. It rationed them.

Rebalance once a year, whenever either side drifts more than 10 percentage points. It stops equity from building up before a fall you cannot afford at 70, and stops you from fleeing to deposits just as the recovery begins.

Three buckets of portfolio creation

Knowing your number does not tell you where to keep it. In retirement, the split matters as much as the size of the corpus, because the money has to last without rattling you every time the market falls 10 per cent. So divide it by when you will need it, not just by equity against debt.

Bucket 1 - Emergencies and medical bills. Divide into three layers, in order. A health policy with a top-up above it, to meet the bill first. A liquid debt fund with a ring-fenced corpus for the portion insurance does not cover. And a credit card or a low-cost collateralised overdraft, to buy two to four weeks so you release the corpus in an orderly way instead of selling equity into a falling market.

Bucket 2 - Daily expenses. The next year of household spending, kept in a savings account and liquid debt funds. Same-day access, no fall in value on the morning you need the cash. It exists so you never have to sell a growth asset at the wrong time.

Bucket 3 - The long-term portfolio. The money you will spend in the latter half of your retired years, and what you leave to your family. A 50:50 equity-debt split, rebalanced once a year, with equity in flexi-cap or multi-cap funds and debt in a short-duration debt fund. This portfolio has to beat inflation over that stretch, and only equity offers that. If you hold it entirely in debt, you haven’t removed risk. You have swapped a market fall for a shrinking lifestyle. We built the full case for this mix at length in December; check it out if you haven’t.

Your retirement checklist

Everything so far has been about the number in the abstract: what to take out of it, what can dent it, how long it has to last, where to keep it. This is where it stops being ours and becomes yours. Give it a few quiet minutes, a pen, and the figures you actually have.

This is an honest look at your own situation, best taken while there is still time to act on what you find.

First, on how this sum is built. It assumes a 35-year retirement, a 50:50 equity-debt portfolio earning 9.5 per cent a year, no return on the money already promised away, inflation at 5 per cent a year, and withdrawals before tax. The 35 years is deliberately strict, because a strict yardstick is harder to fool. Shorten the horizon, and the corpus you need shrinks with it.

Most retirement questionnaires ask how prepared you feel. This one aims to skip feelings, and only care about what your numbers say. You already know four of them: the money you have, what you have promised away, your monthly expenses, and how fast you mean to draw. The tool calculates the other four and gives you a plain verdict: funded, short, or not funded at all.

The line that matters is line 3, your real number, what is genuinely yours once the promises are set aside. Everything after it simply holds that number against the rule. Fill it in.

The example (for your reference only) runs one household straight through. They retired with Rs 2.5 crore and spend Rs 60,000 a month and feel comfortable. Subtract the Rs 50 lakh promised for a daughter’s wedding and a parent’s care, and their real number is Rs 2 crore, against the Rs 2.1 crore they need. Read line 8: a coverage of 0.95. Now read what that score means. 

Our example scored 0.95, so the verdict is slightly short: the corpus stands, but leaves no room for a shock, and the fix is to reduce the draw or trim a commitment.

Retire on what is left

A pension planned for one life doesn’t survive a household that leans on it for three. A Western retirement calculator was never designed to ask this question because it was never designed for this kind of family.

Ravi’s real number was never the Rs 3.5 crore on his spreadsheet. It was Rs 2.4 crore, the part that was actually his to spend. He found that out after a hospital bill forced the question on him. You get to find it out on your own terms, before any hospital forces the question on you.

Find your number. Subtract what you already owe. Plan only on what remains. Remember, that is not a smaller retirement. It is the only one that was ever actually yours.

Also read: When India sold IT, the giants held on

This article was originally published on August 20, 2026.