Retirement and the long game
How large does the corpus need to be, and what gets you there?
8 of 8 chapters published
Chapters
Beginner
- What the number isRetirement is not an age, it is a sum of money large enough that it can replace your income for the rest of your life. Working out roughly how large takes ten minutes and almost nobody has done it.
- The three potsMost Indians arrive at retirement with money in three places they rarely think of together — the employer scheme, the voluntary long-term pots, and ordinary investments. Adding them up is the first useful thing you can do.
- The National Pension SystemA pension account with two tiers, an unbundled structure where no single entity controls the system, and one rule that decides everything — at least 40% of the corpus must buy an annuity.
Intermediate
- AnnuitiesYou hand over a lump sum and receive an income for life. It is the only product that removes the risk of outliving your money — and it does that by taking the capital, permanently, at a rate fixed on one day.
- The withdrawal rateHow much you can take each year without running out. The familiar 4% is a rule of thumb from another market and another era, and the single most effective improvement on it is being willing to take less in bad years.
- The risks of a long retirementFour risks, and the one people prepare for is the least dangerous. Living a long time, prices rising, needing care, and losing the ability to manage your own money are what actually threaten a retirement plan.
Advanced
- The transition yearsThe five years either side of stopping work are when the portfolio is largest, contributions stop and withdrawals start. A severe fall in that window does damage that later good years cannot undo.
- A retirement planSeven chapters as one page — the number, the gap, the contribution, the structure and the floor. And the end of the Finance stream, which has been one argument the whole way.