50K Spends & 1 Cr in Assets—Is Financial Freedom Calling or Caution Advising?

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Quitting your job with ₹1 crore in assets and ₹50,000 in monthly expenses may sound tempting, but financial experts urge caution. Here’s a quick reality check before you make the leap.

Key Highlights:

Annual Expense vs. Corpus: Your yearly expense is ₹6 lakh. With ₹1 crore, this covers about 16–17 years—assuming zero inflation and no investment growth, which is unrealistic.

Inflation Impact: Even modest inflation (6–7%) will erode your corpus faster. In 10 years, ₹50,000/month could double, making your savings insufficient.

Safe Withdrawal Rule: The 4% rule suggests withdrawing only 4% of your corpus annually for a sustainable retirement. For ₹1 crore, that’s ₹4 lakh/year—well below your ₹6 lakh requirement.

Investment Returns: If your assets generate 7–8% post-tax returns, you may stretch your funds, but market volatility and emergencies could derail plans.

No Income Cushion: Without additional income, you risk running out of money, especially if you live 25–30 more years.

Outlook:

With current assets and expenses, leaving your job now is financially risky. Consider building a larger corpus, reducing expenses, or creating alternate income streams before taking the plunge. Consult a financial planner for a customized retirement strategy.

Source: Economic Times