Will your money last?

It depends almost entirely on one setting most calculators do not have. Drawing ₹50,000 a month from ₹1 crore at an assumed 8%, a level withdrawal lasts indefinitely and leaves ₹3.43 crore after thirty years, because 8% on a crore is more than ₹6 lakh a year and you are only taking ₹6 lakh.

Raise that withdrawal with inflation so it keeps buying the same things, and the same corpus runs out in year 22. Same money, same return, same starting withdrawal. The only difference is whether the plan admits that prices rise.

On the default figures, ₹38,651 a month rising with inflation, against the ₹50,000 the reader started with. That is the largest amount that still leaves something after thirty years. If you hold the withdrawal level instead and accept the falling purchasing power, ₹72,891 is sustainable. The gap between those two numbers is the cost of protecting what your income can actually buy.

It is an American rule of thumb: withdraw 4% of the starting corpus in year one and raise it with inflation, and the money should last thirty years. Whether it carries to India is genuinely contested, because it was derived from a specific history of US stock and bond returns and Indian inflation has run higher. On the defaults here, ₹38,651 a month from ₹1 crore is about 4.6% a year, which is close to the rule and arrived at from Indian assumptions rather than imported. Treat either as a starting point to test, not a law.

Because the withdrawal has to rise every year for thirty years while the corpus is shrinking, so the two work against each other and both accelerate. ₹50,000 a month at 6% inflation becomes ₹1.6 lakh a month by year twenty-one. The corpus is being asked for three times as much at exactly the point it is least able to give it, which is why depletion, when it comes, comes suddenly.

The risk that bad years arrive early rather than late. During accumulation the order of returns barely matters; during withdrawal it matters enormously, because a fall in the first few years forces you to sell more units to fund the same spending, permanently reducing what is left to recover. Two people with identical average returns can have completely different outcomes. Nothing on this page models it, and it is the strongest argument for holding two or three years of spending in something that cannot fall.

A systematic withdrawal plan is an instruction to redeem a fixed amount on a fixed date, which is mostly a convenience and a discipline rather than a different financial outcome. The genuine advantage is behavioural: it stops the monthly decision about whether now is a good time to sell. What matters far more than the mechanism is the amount, and whether it rises with inflation.

Each redemption is a sale, so each one realises a capital gain on the units sold, which are taken oldest first. For an equity fund, gains on units held over a year are taxed at 12.5% above ₹1.25 lakh of gains in the year. Only the gain portion is taxed, not the whole withdrawal, which is why drawing from a fund is usually more tax-efficient than an equivalent interest income. The capital gains calculator works through it.

There are only four levers and it is worth being blunt about them: spend less, work longer, take more risk with the balance, or accept that the plan runs short. Only the first two are reliably in your control. Discovering this at 58 leaves options that discovering it at 72 does not, which is the entire reason to run the arithmetic now.