Alternative Path to Corpus Calculation

The SWR Is Based on Life Expectancy Models

The famous 4% Rule (or 3.5% for conservative planning) comes from the Trinity Study, which tested:

How much can you safely withdraw every year from a retirement corpus invested in equity + debt without running out of money — over a 30 to 50-year period?

That period includes most people's post-retirement lifespan:

• Retire at 60 → live till 85 = 25 years

• Retire at 45 → live till 85 = 40 years

• Retire at 35 → live till 90 = 55 years

  
  

🔥 So, the earlier you retire, the longer your money must last — and the lower your Safe Withdrawal Rate must be.

📉 Longer Retirement = Lower SWR Needed

Retirement Duration	Suggested SWR	Rule of X (Multiplier)
25–30 years	4.0%	25× expenses
40 years	3.5%	28.5–30× expenses
50+ years	3.0%	33–35× expenses

💡 So, how is corpus calculated?

Corpus Required = Last Annual Expense × Corpus Multiplier

This means: your FIRE corpus is based not on your income or age, but on how long you expect to live after retirement, and how much you’ll need to spend annually during those years.

🧠 In Short:

• Life expectancy doesn’t appear as a variable in the formula, because it’s already reflected in the SWR you choose.

• The younger you retire, the larger your multiplier needs to be.

• If you want a zero-fear retirement, plan conservatively — even 35× expenses isn’t too much.

  
  

"FIRE is not just about how much money you have — it’s about how long you’ll need it to work for you."

Realistic FIRE Calculation: Retire at 45, Live Till 90

• Retirement Duration = 90 − 45 = 45 years

• Estimated Annual Expense at 45 = ₹21.62 lakh (adjusted for 6% inflation)

• You want zero risk of running out of money → go with a very conservative SWR

• So, use a Corpus Multiplier of 45× — to match 45 years of post-retirement expenses

  
  

🧮 Final Calculation:

Corpus Required = ₹21.62 lakh×45 = ₹9.73 crore

✅ Answer: ₹9.73 crore

That’s your freedom number if:

• You retire at 45

• Plan to live till 90

• Want to fully self-fund 45 years of living expenses (no side income, no dependence on kids, no compromise)

  
  

🧠 Why This Works:

• This approach assumes constant annual withdrawal, i.e., ₹21.62 lakh/year

• Does not assume portfolio returns (i.e., assumes you just spend, not invest after 45)

• That’s why 45× is ultra-safe — more than typical FIRE plans (which rely on 3–4% returns even after retirement)

  
  

🔁 Compare With SWR-Based Method:

If you still plan to stay invested post-retirement (e.g., 50–60% in equity), then:

Corpus = ₹21.62 lakh / 0.03 = ₹7.2 crore

So:

• ₹7.2 crore = Corpus assuming 3% return covers inflation (growth model)

• ₹9.73 crore = Corpus assuming zero returns, fixed cash drawdown for 45 years (capital depletion model)

  
  

🧭 The Bigger Picture:

"If you want to retire early and sleep peacefully, plan your corpus based on how many years you want to stay free — not just how much you want to spend."

🔒 Planning for 45× ensures true peace of mind.