Early Retirement at 38 with INR 12 Crore Corpus: Should I Quit My Job?

Ans: You have accumulated a commendable corpus of Rs. 12-13 crores.

Retiring early to travel and live modestly is possible with careful planning.

Below is a 360-degree evaluation of your financial readiness for early retirement.

Assessing Financial Sufficiency
Monthly and Annual Expenses
Estimate your basic monthly expenses accurately, including living costs and travel budgets.

Factor in inflation, as costs will rise over the years.

Set aside funds for emergencies and unplanned expenses.

Travel Dreams and Lifestyle
Hostels and modest travel plans will help manage your expenses.

Create a travel budget, considering annual trips and their associated costs.

Include international travel insurance for health and emergencies.

Corpus Sustainability
Rs. 12-13 crores can last decades if invested efficiently.

Withdraw only a sustainable percentage annually, to ensure long-term corpus health.

Avoid liquidating large amounts for non-essential purchases.

Investment Strategy for Long-Term Growth
Diversified Portfolio
Split the corpus into equity mutual funds, debt instruments, and liquid funds.

Equity mutual funds offer higher returns for long-term goals.

Debt instruments provide stability and regular income.

Tax-Efficient Investments
Use instruments offering tax benefits to reduce liabilities.

For equity mutual funds, keep LTCG below Rs. 1.25 lakh annually to avoid higher taxes.

Include tax-free options like PPF for stability and savings.

Regular Income Plan
Use a mix of SWPs from mutual funds and interest income for monthly needs.

Ensure income sources are reliable and cover all your expenses.

Keep an emergency fund equal to 2 years of expenses in liquid assets.

Health and Risk Management
Health Insurance
Upgrade your health insurance to cover global medical expenses.

Choose policies that include travel-related health contingencies.

Contingency Planning
Set up a separate fund for emergencies like medical crises or major life changes.

This fund ensures your retirement plan stays on track.

Risk Mitigation
Avoid high-risk investments that could erode your corpus.

Regularly rebalance your portfolio to match your goals and market conditions.

Planning for Inflation
Expense Growth
Use a conservative inflation rate of 6-7% for long-term calculations.

Review your plan periodically to adjust for actual inflation trends.

Corpus Growth
Ensure your investment returns outpace inflation over the long term.

Equity investments provide this growth if managed well.

Addressing Key Concerns
Leaving Your Job
Early retirement is feasible if expenses and corpus are managed wisely.

Financial independence offers freedom to explore your dreams.

Corpus Longevity
With disciplined withdrawals, your corpus can last well beyond 30 years.

Regular reviews and adjustments will keep your plan sustainable.

Reassessing Periodically
Review your financial situation every 3-5 years.

Adjust your withdrawal rate or expenses if needed.

Final Insights
Retiring at 38 is achievable with your current corpus and modest lifestyle.

A well-diversified, tax-efficient investment plan is essential.

Keep a disciplined approach to spending and withdrawals.

Secure comprehensive health insurance and maintain a contingency fund.

Periodic reviews will ensure your retirement stays financially sound.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment