Withdrawal rate
The share of your retirement savings you take out each year to live on.
Your withdrawal rate is how fast you spend your retirement savings: the share of the corpus you take out each year. Small changes make a big difference. In our illustration, a 1 crore rupee corpus earning 7% a year, with withdrawals rising 6% a year for inflation, lasts about 28 years starting at 4 lakh rupees, and about 18 starting at 6 lakh. Keeping it modest is the simplest way to make savings last.
Questions people ask
What is a withdrawal rate?
It's the share of your retirement savings you take out each year, usually stated as a percentage of the starting amount. Taking 4 lakh rupees from a 1 crore rupee corpus in the first year is a 4% withdrawal rate.
What is a safe withdrawal rate in India?
There's no single safe number. It depends on your returns, inflation and how long you live. In our illustration, a 1 crore rupee corpus earning 7% a year, with withdrawals rising 6% a year, lasts about 28 years starting at 4 lakh rupees, but only about 18 starting at 6 lakh. Treat any rule of thumb as a starting point, not a guarantee.
Flag a possible issue
One money lesson, in your inbox
A short, plain money lesson built from real news. Free. Unsubscribe anytime.
We will never spam you or sell your details. How we handle your email