Are most Indians are planning for a retirement that no longer exists? Chartered Accountant (CA) and financial advisor Nitin Kaushik think so.<\/p>\n
In a viral post on social media platform X, Kaushik noted that most people’s retirement plans<\/a> are outdated and fail to consider current realities and what this means for future expenses.<\/p>\n \u2018A retirement that NO LONGER EXISTS\u2019<\/p>\n According to Kaushik, while times (and expenses) have changed, most people are continuing the old methods of retirement planning<\/a>. And while true and tested, they could ultimately be insufficient due to the wider picture.<\/p>\n Also Read | FDs vs PPF: Check rates, tenure, tax benefit and risks<\/a><\/p>\n \u201cMost Indians are planning for a retirement that NO LONGER EXISTS. The traditional rules of thumb are failing because they ignore the \u201cTwin Killers\u201d of 2026: healthcare inflation <\/a>and longevity. If you are calculating your retirement based on a 4% withdrawal rate and a 20-year horizon, you are mathematically likely to run out of money by your 70s,\u201d Kaushik noted.<\/p>\n He added that general inflation in India is near 5%, but medical inflation is a whopping 12-14% and while growing age comes more chances that you would need to spend some of your savings on healthcare. Breaking down the likely costs after inflation, Kaushik warned: \u201cA hospital procedure that costs \u20b95 lakh today will cost \u20b927 lakh in 15 years. If your corpus doesn\u2019t have a dedicated medical <\/a>buffer of at least 25%, a single major illness will liquidate your entire retirement plan.\u201d<\/p>\n Retirement planning: What should you do?<\/p>\n According to the CA, the new rule should be an absolute minimum of \u201c300x monthly expenses\u201d for 2026, and this is \u201cnot a conservative target\u201d.<\/p>\n He explained that to sustain a lifestyle <\/a>of \u20b91 lakh per month in 2026 till your retirement age, you would need to build a corpus of at least \u20b93.5 crore \u2014 with qualifiers. \u201cThis assumes you retire at 60 and live until 85, with your investments yielding a 2% \u201creal return\u201d above inflation,\u201d Kaushik noted.<\/p>\n Also Read | Tax savings FDs vs National Savings Certificate? Choose what works best for you<\/a><\/p>\n He also noted that there are some United States market specific rules that have seeped into the Indian financial planning<\/a> space, that do not necessarily work for our economy. On the 4% rule, Kaushik feels that withdrawing 4% of your corpus annually was designed for the US market, but \u201cin India\u2019s high-inflation environment, a 3% withdrawal rate is the new safe harbor\u201d.<\/p>\n Why is this 1% important? \u201cWithdrawing \u20b94 lakh annually from a \u20b91 crore corpus sounds safe, but by year 10, that \u20b94 lakh will only buy you what \u20b92.2 lakh buys today,\u201d Kaushik explained.<\/p>\n Make the math work for you<\/p>\n So, how do you make the math work out? Kaushik feels that lifestyle arbitrage is the only way for middle-class<\/a> professionals with no generational wealth to fall back on.<\/p>\n This would include moving from a Tier11 metro city such as Bengaluru <\/a>to a Tier-2 city like Coimbatore, because you can have the same or sometimes better lifestyle for a much lower price. A simple address change could \u201creduce your \u201cburn rate\u201d by 40% instantly. It effectively adds 10 years to your portfolio\u2019s lifespan without you saving an extra rupee,\u201d he explained.<\/p>\n Also Read | Bank FDs earn up to 7.5%! Check latest fixed deposit interest rates for Mar 2026<\/a><\/p>\n