Question 1

How is the retirement corpus calculated?

Accepted Answer

We use the 4% rule: your target corpus is your annual expenses at retirement divided by 4% (or multiplied by 25). Your current monthly expenses are first projected forward to your retirement year using your expected inflation rate, then annualised and divided by 4%.

Question 2

What is the 4% rule?

Accepted Answer

The 4% rule says you can withdraw 4% of your retirement corpus in the first year and adjust that amount for inflation every year after, without running out of money for 30+ years. It is a widely used starting point for FIRE (Financial Independence, Retire Early) planning, not a guarantee.

Question 3

Should I use a lower withdrawal rate than 4%?

Accepted Answer

Retiring earlier than the traditional retirement age means your corpus needs to last longer, so some FIRE planners use a more conservative 3–3.5% withdrawal rate instead of 4%. A lower rate means a larger corpus target but more of a safety margin.

Question 4

Does this account for medical and healthcare costs?

Accepted Answer

Not separately — healthcare inflation in India typically runs higher than general inflation, so it is worth adding a buffer of 15-20% to your monthly expenses input, or keeping a separate health insurance and emergency fund outside this corpus.

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