For many Indians, retirement planning has traditionally revolved around a familiar playbook—fixed deposits for safety, gold and real estate for wealth preservation, and a gradual reduction in equity exposure.
But with longer life expectancy, inflation and evolving investment options, financial experts believe retirees need a more balanced approach that prioritises income stability, liquidity and long-term growth.
While there is no one-size-fits-all retirement portfolio, experts say the focus should shift from chasing an arbitrary retirement corpus to assigning every rupee a specific role.
There is no 'ideal' retirement corpus
Retirement planning often gets reduced to a single question: How much money is enough? Social media is flooded with claims that Indians need ₹15 crore or ₹20 crore to retire comfortably, creating anxiety among investors.
However, according to the Jiraaf Research Team, retirement adequacy depends far more on lifestyle, monthly expenses, city of residence, healthcare needs and dependents than on a headline number.
The research team points out that a couple planning to retire in their early to mid-50s with monthly expenses of around ₹1 lakh may be adequately served with a retirement corpus of ₹4-5 crore, assuming a retirement horizon of nearly three decades.
However, the requirement could rise to ₹8-10 crore for those living in metros like Mumbai or Bengaluru or seeking a premium lifestyle with monthly expenses closer to ₹2 lakh. This, they argue, makes blanket retirement targets such as ₹15 crore less meaningful.
Why bonds work well for retirement income
Bonds bring predictability to retirement planning. Investors know the coupon, expected cash flow, and maturity date. This helps create a clearer income plan.
For example, if a retired couple needs around ₹90,000 a month, a ₹1.3 crore bond portfolio earning 9% can generate about ₹97,500 a month before tax.
That can cover regular expenses without forcing the investor to sell equity funds during a market correction.
According to Nishchay Nath, Founder & CEO of BondScanner, instead of searching for an ideal asset allocation, retirees should think of their portfolio as serving three distinct purposes.
The first is a safety bucket, which should hold around two to three years of living expenses in highly liquid instruments such as savings accounts, short-term fixed deposits and liquid mutual funds. This ensures that essential expenses are insulated from market volatility and do not require investors to sell long-term assets during unfavourable conditions.
The second is the income bucket, where high-quality fixed-income instruments play a central role. Nath suggests creating a laddered bond portfolio by investing across government securities and AAA-rated corporate bonds with staggered maturities over several years. As bonds mature periodically, they generate cash flows that can either fund annual expenses or be reinvested depending on prevailing interest rates.
He notes that bonds have historically remained underutilised by Indian retirees not because they were unsuitable, but because the corporate bond market was largely designed for institutional investors with high minimum investment thresholds. Many investors were familiar with fixed deposit rates but remained unaware that bonds issued by government-backed institutions could offer comparable returns while becoming increasingly accessible to retail investors.
One common mistake retirees make is exiting equities entirely once they stop working.
Nath believes that retirement today can last 20 to 30 years, particularly for those retiring in their 50s. Over such long periods, inflation continues to erode purchasing power, making a disciplined allocation to equities essential even after retirement.
Rather than eliminating growth assets, he recommends gradually reducing equity exposure with age while increasing allocations to safety and income-oriented investments. The objective is to balance regular cash flows with long-term capital appreciation.
Fixed income isn't only for retirees
The importance of fixed income extends beyond retirement planning.
According to Vineet Agarwal, Co-Founder of investment platform Jiraaf, there is a widespread misconception that fixed-income investments are relevant only for retirees. He argues that every investor, regardless of age or life stage, should allocate a portion of their portfolio to relatively stable, low-volatility assets to improve diversification and reduce overall portfolio risk.
Such allocations can provide stability during periods of market turbulence while complementing growth-oriented investments.
Give every rupee a purpose
Financial planners increasingly believe that successful retirement planning is less about finding the perfect asset allocation and more about defining the purpose of each investment.
A well-structured retirement portfolio should ensure immediate liquidity for emergencies, generate predictable income to meet regular expenses and continue participating in long-term economic growth to preserve purchasing power.
Rather than chasing a universal retirement corpus, investors may benefit more from building a portfolio aligned with their own lifestyle, financial obligations and risk appetite.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
