Post-FIRE SWP Sustainability - How Long Will My Corpus Last?

A worked example: Ramesh, 58, retiring in Coimbatore

Ramesh sold his flat in Bengaluru and moved back to Coimbatore, where costs are lower and his parents' old house needed someone in it anyway. He's sitting on a ₹3.1 crore corpus, spread across a couple of Parag Parikh and HDFC index funds, an SCSS account for his mother, and some PPF that matures in two years. He wants ₹1,00,000 a month to live on, comfortably, with a Kerala trip most years and his daughter's wedding somewhere in the next five.

₹1,00,000 a month is ₹12,00,000 a year, which against a ₹3.1 crore corpus works out to roughly 3.87%, a bit above our 3.3% default. Punch that into the calculator with a 12% return assumption and 6% inflation and it'll trace the corpus year by year: withdrawals rising with inflation, the balance growing at the assumed return, the two lines racing each other. At 3.87% the corpus survives comfortably into his late eighties in the base run, but add a stress-test crash in year four, right when he'd also budgeted the wedding, and the picture changes. That's the whole reason to run the stress test rather than trust the smooth line.

If Ramesh instead withdrew ₹85,000 a month, closer to the 3.3% line, the calculator would very likely show the corpus outlasting him by a wide margin, at the cost of a tighter monthly budget for the next thirty years. That trade-off, between spending more now and having more margin for a crash later, is the entire decision this tool exists to inform.

Reading the output correctly

"Corpus lasts to age 94" does not mean your corpus is safe. It means that under one specific, deterministic path of 12% returns and 6% inflation, applied evenly every single year, the money runs out at 94. Real returns don't arrive evenly. Some years the Nifty is down 20%, some years it's up 35%, and the order those returns arrive in matters more than most people expect, especially in the first five to ten years after you stop earning a salary.

The stress test exists because the smooth-line result is the optimistic case. If your corpus survives the stress test with a crash applied early, that's a far stronger signal than a good number in the base run. If it doesn't survive the stress test, that doesn't mean disaster is certain, it means you have less margin than the headline number suggests.

Common mistakes with SWP planning

People often set the withdrawal amount to match their current salary-funded lifestyle exactly, without accounting for the fact that some costs, like a daily office commute or work clothes, disappear after retirement while others, like health insurance premiums once an employer stops covering you, go up.

Another common one: ignoring taxation on the SWP itself. Each SWP instalment from an equity mutual fund is a redemption, and gains above ₹1,25,000 a year are taxed at 12.5% LTCG. The calculator shows pre-tax corpus depletion; your actual take-home from each withdrawal is a little lower once you account for the capital gains portion.

And people run the calculator once, at the point of deciding to retire, and never again. A stress test result from three years ago, before a market correction actually happened, is not the same as your corpus's real position today.

What this doesn't model

This calculator does not model random, year-to-year variance in returns. The stress test applies a fixed shock at a fixed point, which is useful as a worst-case check but is not a Monte Carlo simulation across thousands of possible return sequences. A more complete picture would run hundreds of random paths and show the percentage that survive, which this tool doesn't do.

It also assumes withdrawals happen annually in the underlying maths even though real SWPs are monthly, and it doesn't model the LTCG tax drag mentioned above, or the possibility that a large chunk of the corpus is illiquid, locked in real estate or an NPS annuity that can't be redeemed on demand. If a meaningful part of Ramesh's ₹3.1 crore were tied up in a second property, this tool would still count it as spendable corpus, which it isn't, not without selling it first.