Are Indians planning for a retirement that ‘no longer exists’? This CA breaks down which factors are important

Are most Indians planning for a retirement that no longer exists? Chartered Accountant (CA) and financial advisor Nitin Kaushik thinks so.

In a viral post on social media platform X, Kaushik noted that most people's retirement plans are outdated and fail to consider current realities and what they mean for future expenses.

‘A retirement that NO LONGER EXISTS’

According to Kaushik, while times (and expenses) have changed, most people are continuing the old methods of retirement planning. And while true and tested, they could ultimately prove insufficient due to the wider picture.

“Most Indians are planning for a retirement that NO LONGER EXISTS. The traditional rules of thumb are failing because they ignore the “Twin Killers” of 2026: healthcare inflation and longevity. If you are calculating your retirement based on a 4% withdrawal rate and a 20-year horizon, you are mathematically likely to run out of money by your 70s,” Kaushik noted.

He added that though general inflation in India is near 5%, medical inflation is a whopping 12-14%. And as you grow older, there are more chances that you will need to spend some of your savings on healthcare. Breaking down the likely costs after inflation, Kaushik warned: “A hospital procedure that costs ₹5 lakh today will cost ₹27 lakh in 15 years. If your corpus doesn’t have a dedicated medical buffer of at least 25%, a single major illness will liquidate your entire retirement plan.”

Retirement planning: What should you do?

According to the CA, the new rule should be an absolute minimum of “300x monthly expenses” for 2026, and this is “not a conservative target”.

He explained that to sustain a lifestyle of ₹1 lakh per month in 2026 till your retirement age, you would need to build a corpus of at least ₹3.5 crore — with qualifiers. “This assumes you retire at 60 and live until 85, with your investments yielding a 2% “real return” above inflation,” Kaushik noted.

He also noted that there are some United States market-specific rules that have seeped into the Indian financial planning space that do not necessarily work for our economy. On the 4% rule, Kaushik feels that withdrawing 4% of your corpus annually was designed for the US market, but “in India’s high-inflation environment, a 3% withdrawal rate is the new safe harbor”.

Why is this 1% important? “Withdrawing ₹4 lakh annually from a ₹1 crore corpus sounds safe, but by year 10, that ₹4 lakh will only buy you what ₹2.2 lakh buys today,” Kaushik explained.

Make the math work for you

So, how do you make the math work out? Kaushik feels that lifestyle arbitrage is the only way for middle-class professionals with no generational wealth to fall back on.

This would include moving from a Tier-1 metro city, such as Bengaluru, to a Tier-2 city like Coimbatore, because you can have the same or sometimes better lifestyle for a much lower price. A simple address change could “reduce your “burn rate” by 40% instantly. It effectively adds 10 years to your portfolio’s lifespan without you saving an extra rupee,” he explained.

Further, Kaushik also noted the importance of calculating your annual requirements (planned and unplanned) post-retirement, rather than looking at the sum total saved. “Wealth in retirement isn’t about the lump sum you hit on Day 1. It’s about the “Safe Withdrawal Rate” (SWR) relative to your medical trajectory.”

“After crunching the 2026 cost-of-living data, the reality is clear: if you aren’t planning for a 30-year horizon with double-digit medical costs, you aren’t planning for retirement, you’re planning for a crisis,” he added.

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