Safe withdrawal rates

A "withdrawal rate" is simply the fraction of your starting corpus you spend in the first year of retirement, then adjust for inflation every year after. A 4% withdrawal rate on a 2 crore corpus means spending roughly 8 lakh in year one, then 8 lakh plus inflation in year two, and so on.

The idea of a single universal "safe" rate (often quoted as 4%, from research on US market history) is a rough starting intuition, not a rule — it depends heavily on how long the money needs to last, what it's invested in, and the specific sequence of returns your retirement happens to draw. A shorter retirement, or a period of unusually strong markets, safely supports a higher rate. A longer retirement, or bad luck early on, needs a lower one.

Rather than trusting one fixed percentage, the more reliable approach is simulating your own specific numbers — your corpus, your spending, your allocation, your time horizon — across thousands of possible market paths, and looking at what fraction of those paths survive. That's the success probability the Retirement Planner reports: a direct answer to "is my specific withdrawal rate safe", rather than a borrowed rule of thumb.

Flexibility also matters more than the headline rate. A retiree willing to trim spending in a bad year (rather than mechanically withdrawing the same inflation-adjusted amount regardless of markets) can safely sustain a meaningfully higher starting rate than a rigid one — see the guardrails comparison on the Retirement Planner for how much that flexibility is typically worth.