Retire on Your Terms: The Freedom of Living Beyond 60

August 29, 2025

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For decades in India, retirement has been viewed as the end of a career, a time to wind down, and an era of quiet dependence. However, a change is now underway. For a younger generation of Indians, retirement is the start of a rich second innings. It's the ability to follow a lifelong dream, see the globe, mentor young minds, or bask in the rewards of a well-lived life. This can happen if it is grounded in a wise, proactive retirement plan.

Retiring on your terms implies that you have the financial freedom to decide how you live the next 25-30 years of your life. It's about earning a return from investments that pays for your aspirations long after your income has ceased. This does not occur by accident; it happens by careful and calculated planning.

The New Realities of Retirement in India

Why is retirement planning more important today than ever before? The dynamics have changed so much.

● We Are Living Longer: Due to improvements in healthcare, our longevity has greatly improved. A retirement at 60 may imply that you will have to support a way of life for yet another 25, 30, or even 35 years. A corpus that was sufficient for 15 years can be perilously inadequate for a 30-year tenure.

● The Quiet Menace of Inflation: Inflation is the termite that consumes your savings. A cost of INR 50,000 monthly today may become INR 2 lakh monthly in 20 years. Healthcare inflation, in fact, tends to be in double digits, and so healthcare is one of the largest expenses after retirement. Your scheme should not only keep your capital intact but actually increase it to overcome inflation.

● Changing Family Arrangements: The conventional joint family setup, which used to serve as a strong support system for older generations, is changing. Financial independence during our silver years is no longer an option but a necessity.

Building Your Freedom Fund

Developing a strategy to retire on your own terms is a disciplined process. Here's how you can begin to build your freedom fund.

Step 1: Establish Your "Freedom Lifestyle"

Before you can reach a figure, you require a vision. How does your vision of your life after 60 looks? Is your vision a peaceful life in your hometown, indulging in interests like gardening and reading? Or are you looking to travel the world, both in India and overseas? Or would you like to establish a small consultancy or spend time undertaking social work?

Your lifestyle requirements will establish your financial needs. Be sincere and clear about what you desire, as this vision will be your "why" that drives your savings and investment commitment.

Step 2: Determine Your Magic Number

After you have a vision, you must quantify it. The most important thing is to calculate your retirement corpus. Although a financial advisor will be able to provide you with an exact amount, one easy method of approximation is using the 4% withdrawal rule as an approximate basis on systematic withdrawal plan basis (SWP). You can withdraw safely 4% of your entire corpus in your initial year of retirement and then adjust for inflation after that.

For instance, if your first-year expenses in retirement are estimated at INR 12 lakh, you would need a corpus of about INR 3 crore for your entire retirement years. This figure, referred to as your "Freedom Fund", is your chief target.

Step 3: Build Your Financial Foundation:

This is the stage of placing a shield around your finances so you can withstand unexpected shocks. A strong foundation ensures that you can focus on wealth creation without being derailed by emergencies.

1. Conduct a Financial Health Check-up:

• Start with clarity: track your income, expenses, assets, and liabilities. Categorize expenses into essentials (rent, groceries, EMIs) and non-essentials (subscriptions, eating out, lifestyle upgrades). This helps you know whether you run a surplus or deficit each month. A simple need vs. want analysis ensures that your savings are directed toward meaningful goals instead of being drained by unnecessary wants.

• Equally important is assessing and managing debt. Good debt like a home loan or education loan passes the “AA Test” (Adds to Assets or Adds to Income). Bad debt like high-interest personal loans or credit card dues does not.

• Ensure total EMIs stay within 30–40% of your monthly income, which is your debt-to-income (DTI) and keep debt lower than total assets to preserve positive net worth. Smart debt management prevents liabilities from stifling your financial growth.

2. Build Your First Line of Defence:

Set aside 3–6 months’ worth of necessary living expenses in a separate, high-interest savings account or short-term liquid fund. This buffer prevents you from falling back on costly loans or dipping into investments when faced with unexpected events such as layoffs, medical bills, or urgent repairs.

3. Protect with Insurance:

Insurance is the final layer of your foundation, acting as a financial safety net for your family.

• Term Life Insurance: Provides high coverage at a low cost, ensuring your dependents’ needs are met if you’re not around. Choose coverage based on income replacement and liabilities. Enhance protection with riders like accidental death benefit, waiver of premium, or child education rider.

• Health Insurance: A family floater policy protects you from rising medical costs and shields your savings during health emergencies. Adding a critical illness rider offers lump-sum cover for life-threatening conditions like cancer or heart attack.

• Disability Insurance: Safeguards your income in case of accidents leading to disability. It ensures continued financial support for your family even if you can’t work.

Together, these measures form a solid foundation. Budgeting discipline, emergency reserves, and insurance protection allows you to move confidently toward your retirement goal.

Step 4: Start Early and Automate Your Investments

The greatest force that can build your retirement corpus is compounding, and its driving force is time. Beginning early, even if it is in a small amount, can make a huge difference. The best way of doing this is through a Systematic Investment Plan (SIP) in equity mutual funds. A SIP makes it automatic, inculcates discipline, and helps you to average your cost of buying over a period of time.

Step 5: Use the Right Retirement Tools

A strong retirement portfolio employs a combination of instruments:

● EPF & PPF: These constitute the secure, core debt component of your portfolio, providing assured, tax-effective returns.

● National Pension System (NPS): A low-cost, dedicated retirement product that provides a combination of equity and debt with good tax benefits.

● Equity Mutual Funds: This is the wealth engine of your portfolio. In the long term (15+ years), equity has the maximum capability to outstrip inflation and generate significant wealth.

Step 6: Safeguarding Your Corpus

Once you reach 5 years from retirement, the focus changes from wealth creation to wealth preservation. You do not want to let a large market downturn liquidate your hard-earned corpus just when you need it. It is time to reduce risk by shifting your investments from high-risk equity funds to lower-risk debt products. A Systematic Transfer Plan (STP) is an excellent tool for shifting investments and allows you to do so methodically & provide some capital protection.

Retirement is the stage at which you have the choice of working or not working according to your wishes. If you plan seriously today, you are bestowing on yourself the greatest gift: the option to live your second innings with happiness, grace, and meaning, on your own terms.

-Sukalyan Halder & Akshit Bajaj

-Dayco India

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Retire on Your Terms: The Freedom of Living Beyond 60

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