To understand how to navigate this income generation journey, ET Wealth Online spoke to Ishkaran Chhabra, chief investment counsellor & founding partner, Centricity WealthTech, Puneet Singhania, Director – Master Capital Services Limited and Gibin John, senior investment strategist, Geojit Financial Services. They shared insights on what a conservative, hybrid and aggressive portfolio can offer.
What is the right monthly withdrawal from Rs 2 crore retirement corpus?
Chhabra says for a retiree with a Rs 2 crore corpus, the right monthly withdrawal depends not just on the corpus size, but on the asset mix, expected returns, inflation, tax efficiency, and the retirement horizon.
“For a 25-year retirement period, it is better to think in terms of a safe withdrawal rate (SWR) rather than simply withdrawing the portfolio yield,” says Chhabra.
Safe withdrawal rate to draw monthly income for 25 years
Since one doesn’t know how long their retirement phase can last, they need to plan for at least 20-25 years. For such a long period, ensuring a continuous monthly income from retirement corpus can be quite challenging. In such a scenario, what can be a safe withdrawal rate to draw a monthly income for 25 years?
John says that if an investor invests 100% in a risk‑free product that provides an average return of 6.5% during the period, they can withdraw Rs 72,000 at the beginning.
John further says, in the future, even if the cost of living increases due to inflation of up to 6% per year, it can still be managed.
Singhania suggests the recommended safe withdrawal rate is 4%. At a Rs 2 crore corpus, a 4% annual withdrawal starts at roughly Rs 67,000/month today.
“The sweet spot for most Indian retirees with a Hybrid + Equity portfolio is 4–5%, not a fixed universal number,” says Singhania.
Withdrawal rate comparison (Puneet Singhania)
| Approach | Withdrawal Rate | Key Insight | Year 1 Monthly (Rs) |
| Conservative | 3% per year | Minimal depletion risk; suitable if longevity is uncertain or equity exposure is low | 50,000 |
| Recommended | 4% per year | Balanced approach for hybrid portfolios (60:40 equity:debt); accounts for inflation | 67,000 |
| Aggressive | 5% per year | Works if real returns stay high; higher risk if markets underperform | 83,000 |
What should be your investment mix based on your risk appetite?
Let us see how the withdrawal rate differs for different mixes of investments and what experts have to suggest.
Illustrative monthly withdrawal from Rs 2 crore corpus (Ishkaran Chhabra)
|
Portfolio Type |
Investment Mix |
Expected Return (Post-tax) |
Withdrawal Rate (Annual) |
Monthly Income (Rs) |
|
Conservative portfolio |
G-Secs, small savings schemes, RBI Floating Rate Bonds |
~6–6.5% |
~4% |
65,000–70,000 |
|
Hybrid portfolio |
Debt instruments + hybrid mutual funds |
~7.5–8.5% |
~4.5–5% |
75,000–85,000 |
|
Sustainable & inflation-adjusted portfolio |
Debt + hybrid + equity mutual funds |
~9.5–10.5% |
~5–5.5% |
85,000–95,000 |
Illustrative monthly withdrawal from Rs 2 crore corpus (Puneet Singhania)
|
Approach |
Return (%) |
Withdrawal Rate |
Income Trend |
Corpus Left After 25 Years |
|
Conservative |
8% |
3% |
Gradual increase (linked to corpus growth) |
~Rs 8.0 – 8.5 crore |
|
Hybrid |
10% |
4% |
Moderate increase |
~Rs 8.5 – 9.5 crore |
|
Equity-heavy |
12% |
5% |
Strong increase |
~Rs 18.0 – 20.0 crore |
Should the withdrawal be by equal rate from all asset classes like equity, debt, gold etc or should it vary?
John advises withdrawals be made from each asset class in proportion for maintaining the portfolio allocation; otherwise, the expected average return may not be achieved.
“Sometimes equity may underperform, and during such periods, investors can utilise hybrid or risk‑free investments. Once equity regains momentum, the portfolio should be rebalanced again,’ says John.
It means that withdrawal can be less form the underperforming assets and more from safer assets to prevent erosion of underperforming assets. For instance, if equities are going through a correction, the withdrawal from equities can be reduced and it should be done from debt funds.
Illustrative monthly withdrawal from Rs 2 crore corpus (Simon John)
|
Approach |
Investment Mix |
Inflation Assumption |
Expected Avg Return (25 yrs) |
Allocation Details |
|
Conservative |
G-Secs, small savings schemes, RBI Floating Rate Bonds |
6% |
6.50% |
100% in risk-free investments |
|
Hybrid |
G-Secs, small savings schemes, RBI bonds + hybrid mutual funds |
6% |
8% |
60% in hybrid funds (9%), 40% in risk-free investments (6.5%) |
|
Sustainable & inflation-adjusted |
Equity mutual funds + hybrid funds + risk-free investments |
6% |
10% |
50% equity MF (12%), 30% hybrid funds (9%), 20% risk-free investments (6.5%) |
Why beating inflation is important and how can you do it?
If the average rate of inflation is 5%, your expenses will increase by the same percentage every year. But if your portfolio has a substantial proportion of hybrid or equity funds, it may deplete during a market downturn. Beating inflation at such a time can be difficult for such an investor. Then how can the person ensure that he beats inflation while keeping pace with the required growth?
Monthly expenses rise at 4%, 5% inflation
| Year | Expenses at 4% inflation (Rs) | Expenses at 5% inflation (Rs) |
| 5 | Rs 58,493 | Rs 60,775 |
| 10 | Rs 71,166 | Rs 77,566 |
| 15 | Rs 86,584 | Rs 98,997 |
| 20 | Rs 1,05,342 | Rs 1,26,348 |
| 25 | Rs 1,28,165 | Rs 1,61,255 |
Singhania advises that the most effective approach is the three-bucket strategy, where one can keep 12–18 months of expenses in liquid funds for immediate needs, 2–3 years in debt funds as a buffer, and the remainder in equity or balanced advantage funds for long-term growth.
“Never touch the equity bucket during market downturns. Maintain 40–50% equity allocation even in retirement; debt-only portfolios barely outpace inflation after tax,” suggests Singhania.
Things to keep in mind when planning retirement from Rs 2 crore corpus
John says retirees should keep in mind that the corpus needs to last for the entire retirement period and so people with a Rs 2 crore retirement corpus should prepare a budget for expenses and ensure that it remains within the maximum withdrawal limit of Rs 72,000.
According to Chhabra, retirees should also keep certain things in mind while planning retirement with a Rs 2 crore retirement corpus.
- Maintain 2–3 years of expenses in liquid/debt assets
- Avoid redeeming equity during market drawdowns
- Plan for healthcare inflation and longevity risk
- Review withdrawals and asset allocation annually
- Focus on post-tax returns, not just headline yields
“A sustainable retirement strategy is not about maximising the first year’s income, but about ensuring that the income remains dependable and inflation-resilient across the full retirement journey,” says Chhabra.
