How much equity should a retiree have?

In an earlier story , we emphasised upon the importance of equity in a retiree's investment plan. We discussed how an all-debt portfolio could put you at risk of outliving your corpus. We also gave you a framework for building a portfolio that serves you well in your retirement years. But one question remains: what is the optimal level of equity exposure? How do you strike the right balance between equity and debt? In this story, let's explore the case of different equity allocations and see how you can draw the line for yourself between optimal level and excessive risk. Case study for finding the optimal equity exposure Suppose you retired at the beginning of 2000. You had a corpus of Rs 1 crore, and the monthly income requirement was Rs 40,000. As per our retirement portfolio approach: You invested a part of your corpus in equity ( flexi-cap funds) and put the remaining amount in debt ( short-duration funds) At the start of each year, you withdrew and transferred your required annual income to a liquid fund and created a systematic withdrawal plan (SWP) from there. Further, you increased your annual income by six per cent every year to tackle inflation. However, if this resulted in your withdrawal amount exceeding six per cent of your corpus value in any year, you took a cut in your income. This is important so that you don't end up depleting your corpus. You rebalanced equity to your stated allocation whenever the deviation ex