Answer Book question
Some. typically 20–40 percent of the corpus in broad equity funds, never individual stocks. because a 30-year retirement needs growth to beat inflation. Zero equity is a slow guaranteed loss of purchasing power; too much equity is a fast possible loss of capital. The buffer on the previous page is what makes the equity slice tolerable.
Some. typically 20–40 percent of the corpus in broad equity funds, never individual stocks. because a 30-year retirement needs growth to beat inflation. Zero equity is a slow guaranteed loss of purchasing power; too much equity is a fast possible loss of capital. The buffer on the previous page is what makes the equity slice tolerable.
A retiree with ₹60 lakh all in FDs at 7 percent finds expenses rising 6 percent a year. Real growth: almost nothing. A 30 percent equity slice over 20 years would have meaningfully raised his late-life income.
Inflation is the retiree's silent risk. Equity is the only mainstream asset that has historically outpaced it over long periods. The allocation should be one you can hold through a 30 percent fall without selling. which the cash buffer makes possible.
Horizon. a 62-year-old likely has 25 years Buffer in place Broad index or balanced funds only Temperament
Either extreme: all FDs, or stock tips from a nephew.
Many Kerala retirees hold no equity and lose ground to inflation quietly for decades. A modest slice via a balanced hybrid fund is the gentlest way in.
₹60 lakh: ₹9 lakh buffer; ₹30 lakh FD ladder/debt; ₹21 lakh balanced and index funds. Withdrawal 5 percent.
A retiree with a corpus barely covering essentials cannot afford equity risk; annuity and FDs are correct there.
Fund the buffer Add equity gradually via STP Use balanced funds if nervous
I don't want stock-market risk. What options should I understand? What is an SWP?
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