Summary of this article
Turn your retirement corpus into sustainable monthly income.
Protect savings from inflation through smart diversified investments.
Keep an emergency fund liquid for quick access.
By Anup Seth, Chief Distribution Officer, Edelweiss Life Insurance
If you live in India, it is quite difficult to escape two financial lessons since your early years: accumulate wealth and plan for your retirement. From the moment you start earning, the message is ‘save more, invest more, build a large corpus.’ But no one talks about what happens after. What comes after you have accumulated the necessary wealth?
Wealth that works for you
Most retirees treat their retirement corpus as if it will last them forever. But every withdrawal chips away at your financial security.
The smarter approach is two-fold: keep your principal growing, and at the same time, convert it into a disciplined, predictable payout. This ensures that your savings don’t just sit idle or get depleted too soon—they actively sustain your financial wellness for the long run.
If you want to rest easy and live out your retirement years worry-free, a simple R.E.S.T. (Regular Encashment and a Sustained Tomorrow) framework can achieve that for you. The essence of the R.E.S.T. approach is quite simple – create structured income payouts and continue growing your capital.
However, a key pre-requisite to R.E.S.T. is disciplined wealth accumulation during your working years. Ensure you begin early and diversify your investments to build an adequate corpus that can maintain your lifestyle, healthcare needs, and passions in the golden years. Once you have built that corpus – through consistency and discipline – it’s time for the R.E.S.T. to kick in.
What is R.E.S.T?
Accumulation alone is not enough. Most people think retirement planning ends when they hit the target corpus. Wrong! The real challenge begins now: how do you make your money work in two shifts—paying you today while continuing to grow for tomorrow.
Use these 3 guiding principles to map out your R.E.S.T. plan:
Income replacement: A key change at retirement is the most evident one – your income stops. So, your priority must be to create an income-like payout which helps you preserve the financial comfort and continuity of a salary. Tools like annuity, pension, or NPS help you create a similar income structure in your retirement years. This will help you take care of your cost of living including monthly utilities and more.
Remember that inflation will eat into your corpus: One key factor that people often overlook is the impact of inflation on their wealth. So, you must ensure that your money continues working for you. Simply explained, Rs . 60,000 could be equivalent to Rs. 30,000 in a couple of years due to inflation. So, invest a part of your corpus in products like guaranteed plans, equities, mutual funds, etc. These products can also be linked to aspirations like legacy planning, funding passions like world travel, etc.
Risk Management for emergencies: Retire or not, life happens. Your knee needs surgery, the house needs repair, and much more, etc. Allocate a part of your corpus to emergencies by keeping them in fixed deposit or liquid funds. This money must be easily accessible and does not depend on a good or bad day in the stock market. You can use tools like ETFs, AAA rated Corporate Bonds, Fixed Deposits etc. You can use this emergency fund instead of selling your growing assets.
Let’s look at R.E.S.T. with the example of Amit, 58 years old, who is fast approaching retirement and has built a corpus worth Rs 3 Cr corpus:
| Need / Goal / Purpose | % of Total Corpus | Amount Allocation (Rs) | Investment Tools (Examples) | Approx. Monthly Cash Flow (Rs) | What This Money Does / How It Helps You |
| Income Replacement | 40% | 1,20,00,000 | Annuities (approx. 6–7% returns) | 60,000 – 70,000 | Covers daily expenses like rent, groceries, utilities, and basic living costs. |
| Letting Your Corpus Grow During Retirement | 35% | 1,05,00,000 | Equity, Mutual Funds, ULIPs, Hybrid Funds, ETFs (approx. 10–12% returns) | 87,000 – 1,05,000 | Enables withdrawals for goals like retirement home or travel, while the rest continues to grow. |
| Emergencies | 15% | 45,00,000 | Savings Accounts, Liquid Mutual Funds, Ultra Short-Term Funds, Short-Term Fixed Deposits (approx. 4–6% returns) | 15,000 – 22,000 | Keeps money easily accessible for emergencies like hospitalization or home repairs. |
| Any Retirement Plans / Discretionary Spending | 10% | 30,00,000 | Balanced Mutual Funds, Conservative Hybrid Funds, AAA-rated Bonds, Guaranteed Saving Insurance Plans (approx. 7–8% returns) | 17,000 – 20,000 | Supports flexible spending on hobbies, travel, and leisure. |
Disclaimer: The above allocations are illustrative and should be reviewed according to your individual risk appetite, financial goals, and investment horizon. All returns mentioned are indicative and subject to market risks, fluctuations, and other factors beyond our control. Past performance does not guarantee future results
Before taking some well-deserved R.E.S.T., define your goals – know when you plan to retire, what is your post-retirement expenses, dreams. Only then can a well- structured and consistent plan secure your financial future.
(Disclaimer: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)
