Section outline

  • The 4% Rule and Indian Math 📏🇮🇳

    The 4% Rule is a popular concept in the FIRE world. It says that if you withdraw 4% of your savings every year, your money will likely last for 30 years or more. But this rule was created in the U.S. — so how does it work for us in India, with our unique costs and inflation?

    • 🔹 What is the 4% Rule, Really?

      Let’s say you need ₹4 lakhs per year to live. To apply the 4% rule:

      FIRE Number = ₹4,00,000 ÷ 4% = ₹1,00,00,000

      This means you need ₹1 crore invested to safely withdraw ₹4 lakhs per year — ideally from mutual funds, index funds, or mixed-income sources — without running out of money for decades.

    • 🔹Is 4% Too High for India?

      In India, inflation can be higher (5–7%), and returns are sometimes unpredictable. So many experts suggest:

      • 📉 Use a more conservative rule — like 3.5% or even 3% withdrawal
      • 📊 Or plan for multiple small income streams post-FIRE to reduce pressure

      🔎 Example: If you stick to a 3.5% withdrawal rate and need ₹4 lakhs a year:

      FIRE Number = ₹4,00,000 ÷ 3.5% ≈ ₹1.14 crores

      Slightly higher — but safer and more India-friendly.

    • 🔹 Blending Strategy for Indian Women

      • ✅ Don’t rely on one method. Mix investments: PPF + SIPs + FDs + health cover
      • ✅ Plan post-FIRE income — consulting, rentals, or hobby monetization
      • ✅ Recalculate your FIRE number every 2 years based on expenses and inflation

      💬 “The math is not scary. It’s honest. And the earlier I know my number, the smarter I can grow it.”

      🌼 Final Thought

      The 4% Rule is a great starting point — not a strict formula. Adjust it to your lifestyle, family needs, and peace of mind. The goal is not just retiring early — it’s retiring smart and safe.