{"id":495909,"date":"2026-03-26T06:19:09","date_gmt":"2026-03-26T06:19:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/495909\/"},"modified":"2026-03-26T06:19:09","modified_gmt":"2026-03-26T06:19:09","slug":"rs-2-crore-retirement-fund-at-risk-during-market-crash-heres-how-to-make-it-more-resilient","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/495909\/","title":{"rendered":"Rs 2 crore retirement fund at risk during market crash? Here\u2019s how to make it more resilient"},"content":{"rendered":"

If the market takes a big hit, most investors panic, including those close to retirement. A Rs 2-crore equity-heavy retirement corpus<\/a> can be reduced to just Rs 1.6 crore if the market falls by 30% before you retire. Often, market slumps last so long that you can\u2019t just sit around, waiting for it to bounce back, especially when retirement is looming.
So, what can you do? Can you make your retirement corpus crash-proof? Or at least something that can cushion the blow of market shocks enough so that your cashflow during the retirement phase isn\u2019t affected by the market fall? <\/p>\n

Vinayak Magotra, product head & founding team, Centricity WealthTech, says that if you are looking to retire in a few years, it\u2019s a good idea to start rebalancing your retirement portfolio at least 24 months ahead of your retirement date. <\/p>\n

\u201cDuring this period, equity exposure can be gradually reduced in a staggered manner, typically through SWPs, to build a more stable debt portfolio,\u201d Magotra explains.<\/p>\n

But what if you are retiring today and the market is yet to recover? Won\u2019t your retirement corpus be hit badly? How will you ensure your monthly cashflow?<\/p>\n

Nehal Mota, co-founder & CEO, Finnovate, suggests bucket strategy as an effective way to manage this risk, allocating 3\u20135 years of expenses in low-risk instruments like liquid funds or fixed deposits.<\/p>\n

How market crash can impact your retirement corpusMota reveals a market crash near retirement can significantly damage the corpus due to sequence of returns risk when negative returns occur just before or after retirement, and withdrawals begin simultaneously. <\/p>\n

\u201cA 25\u201330% fall needs 35\u201345% gains to recover. Early withdrawals during a crash permanently erode wealth,\u201d explains Mota.<\/p>\n

Mota says the concern is not just the market fall, but the reduced base from which withdrawals continue, making recovery difficult even if markets bounce back later.Retirement corpus value when market falls 10%, 20%and 30% (As per Nehal Mota) Corpus 10% fall 20% fall 30% fall \u20b91 crore \u20b91,00,00,000 \u00d7 (1 \u2013 0.10) = \u20b990,00,000 \u20b91,00,00,000 \u00d7 (1 \u2013 0.20) = \u20b980,00,000 \u20b91,00,00,000 \u00d7 (1 \u2013 0.30) = \u20b970,00,000 \u20b92 crores \u20b92,00,00,000 \u00d7 (1 \u2013 0.10) = \u20b91.8 crore \u20b92,00,00,000 \u00d7 (1 \u2013 0.20) = \u20b91.6 crore \u20b92,00,00,000 \u00d7 (1 \u2013 0.30) = \u20b91.4 crore Gain required to recover the loss (in %) 11% 25% 43%
What should an investor do to avoid the impact of market crash on retirement corpus?
Magotra says the bucket strategy is a practical way to deal with this risk. <\/p>\n

He explains that his strategy involves dividing allocations by time; for immediate expenses, he suggests keeping 2-3 years of expenses in safer, more liquid funds to avoid being affected by market fluctuations.<\/p>\n

Shobhit Mathur, co-founder, Ionic Wealth, says the smarter approach is not chasing a \u2018crash-proof\u2019 strategy, but structuring your portfolio into time-based buckets, keeping 2\u20133 years of expenses in low-risk, liquid assets so that equities get time to recover, while staying diversified across equities, global exposure, gold, and income assets.<\/p>\n

Retirement investment strategy explained (as per Vinayak Magotra)
Strategy \/ Approach Time Horizon Asset Allocation Key Objective Key Feature Bucket Strategy \u2013 Short-term 2\u20133 years Safe & liquid funds Protect immediate expenses from market volatility Stability and liquidity Bucket Strategy \u2013 Medium-term Next few years Relatively stable investments Balance risk and returns Moderate risk exposure Bucket Strategy \u2013 Long-term Long-term Equities Higher growth potential Higher risk, higher returns Glide Path \/ Life Cycle Funds (SEBI) Entire lifecycle Starts with high equity, shifts to debt over time Reduce risk as retirement nears Automated, disciplined investing Gradual Equity Reduction Pre-retirement phase Decreasing equity, increasing debt Lower portfolio risk over time Investor-driven adjustments Mota too recommends a bucket strategy, suggesting that you should have at least 2\u20133 years of expenses in safe assets. For 3\u20135 years of expenses, she advises using low-risk instruments like liquid funds or fixed deposits. For 5\u20137 years\u2019 expenses, consider hybrid funds, and for the rest, invest in equities for long-term growth. Component \/ Strategy Time Horizon Asset Allocation Purpose Key Benefit Short-term bucket 2\u20135 years Liquid funds \/ Fixed deposits (low-risk) Cover immediate expenses Protects against market volatility Medium-term bucket 5\u20137 years Hybrid funds Balance risk and returns Provides stability with some growth Long-term bucket Long-term Equities Long-term growth Higher return potential Dynamic asset allocation Ongoing Flexible mix of equity & debt Adjust portfolio based on market conditions Reduces volatility impact Flexible withdrawal strategy During downturns Use debt portion for withdrawals Avoid selling equities in falling markets Prevents losses Safety buffer 2\u20133 years Safe assets Emergency\/near-term expenses Ensures liquidity and stability
Asset allocation for retirement portfolio
If you want to retire today with Rs 1 crore retirement portfolio, what should be your asset allocation for a crash-proof portfolio?<\/p>\n

Mota suggests allocating 30% (Rs 30 lakh) in liquid or ultra-short-term instruments for immediate needs, 40% (Rs 40 lakh) in medium-to-long duration debt or hybrid funds for stability over the medium term, and 30% (Rs 30 lakh) in equity funds such as index or large-cap funds for long-term growth.<\/p>\n

\u201cThis structure ensures liquidity, stability, and growth, making the portfolio more resilient to market shocks,\u201d predicts Mota.<\/p>\n

Is a crash-proof portfolio possible?<\/p>\n

Magotra feels there cannot be a completely crash-proof portfolio and to generate meaningful long-term returns, some allocation to equities is necessary.<\/p>\n

He also says that the key lies in gradually tilting the portfolio towards debt at the right time, well before actual withdrawals begin from the retirement corpus. This shift helps reduce volatility and protects the portfolio as the goal approaches.<\/p>\n

\u201cAs part of this transition, the debt allocation can include high-quality bonds, arbitrage funds, and now even SIFs, depending on suitability and investor requirements,\u201d says Magotra.<\/p>\n

Mathur suggests that a \u2018crash-proof\u2019 portfolio cannot be one-size-fits-all, as it must be designed around your risk profile, expected lifestyle expenses, and the inflation impacting those needs. <\/p>\n

According to his strategy, for a Rs 1-crore corpus, one can allocate roughly 50\u201370% to domestic equities for long-term growth, 15\u201325% to global equities for geographical diversification, 10\u201315% to precious metals like gold as a hedge during market stress and 10\u201330% to income-generating assets such as debt or fixed income for stability and cash flows.<\/p>\n

Rebalancing of retirement portfolio is necessary
Even if your equity allocation for long-term growth is high, you need to rebalance your portfolio as retirement nears and you can shift your equities towards less-risky asset. But when is it the right time to rebalance your portfolio and what should be the percentage of assets you should shift?<\/p>\n

Mota believes it should be done annually or when allocations deviate by 5\u201310%. <\/p>\n

\u201cDuring bull markets, trimming equity exposure and reallocating to debt helps lock in gains, while during corrections, shifting some funds back to equity enables participation in recovery,\u201d Mota explains her strategy. <\/p>\n

Magotra is of view that rebalancing should ideally begin at least 24 months before the actual retirement date. <\/p>\n

Magotra suggests that during this period, equity exposure can be gradually reduced in a staggered manner, typically through SWPs, to build a more stable debt portfolio.<\/p>\n

\u201cThe approach would also depend on the expected withdrawals from the retirement corpus, while factoring in aspects like taxation, exit loads, and overall cash flow requirements,\u201d says Magotra.<\/p>\n

Aspect \/ Theme Nehal Mota Vinayak Magotra Equity exposure Avoid high equity allocation near retirement Ensure portfolio avoids forced equity selling during downturns Liquidity planning Do not ignore liquidity needs Proper structuring prevents distress selling Withdrawal strategy Avoid rigid withdrawal approach Stay invested; don\u2019t react impulsively Market behaviour Timing of returns matters more than average returns Market falls are temporary; avoid panic selling Investor behaviour Focus on discipline and resilience, not risk elimination Avoid emotional decisions during volatility Investment approach Use allocation, liquidity, and rebalancing for stability Do not abandon long-term strategy midway <\/p>\n","protected":false},"excerpt":{"rendered":"If the market takes a big hit, most investors panic, including those close to retirement. A Rs 2-crore…\n","protected":false},"author":2,"featured_media":495910,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,174695,4176,174697,4174,4175,82546,4272,174696,174694,56,54,55],"class_list":{"0":"post-495909","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-crash-proof-retirement-corpus","10":"tag-finance","11":"tag-how-to-plan-withdrawals-at-retirement","12":"tag-personal-finance","13":"tag-personalfinance","14":"tag-retirement-corpus","15":"tag-retirement-planning","16":"tag-retirement-planning-during-market-crash","17":"tag-retirement-strategy","18":"tag-uk","19":"tag-united-kingdom","20":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/495909","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=495909"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/495909\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/495910"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=495909"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=495909"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=495909"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}