Retiring at 60 sounds ideal until you realize you might live till 90. That’s 30 years without a paycheck. Most people plan for 10–15 years of retirement, but with longer lifespans, better healthcare, and earlier exits from work, that’s no longer enough.
Living longer is a gift but only if your money keeps up. Inflation won’t stop. Medical costs will rise. Emergencies will come. Without reliable income, your savings may not last, and your lifestyle could suffer.
This isn’t just financial math it’s about dignity, independence, and peace of mind at 80.
This piece unpacks why retiring too early can backfire and what steps you need to take now to avoid running out of money later.
– Let us take a scenario to understand more about it
At 60, Sunita retired after 35 years as a school principal. She’d done everything right saved regularly, invested in FDs, had health insurance, and planned for her expenses. For a decade, retirement was peaceful. But by 75, rising costs, falling interest rates, and mounting medical bills began to chip away at her financial comfort.
Her story reflects a growing problem. In India, many still plan for 15–20 years of retired life, but people are living well into their 80s and 90s. A retirement starting at 60 can now stretch 30 years or more making it not just a break, but a full financial phase.
Without sustained income, smart investment planning, and inflation-aware strategies, the “golden years” risk turning into years of anxiety.
The real question isn’t when to retire it’s how long your money will last. This piece explores the urgent need to rethink retirement planning for longer, healthier lives.
– The Retirement Planning Gap
Many still see retirement as a short, restful break maybe 15 years at most. But in reality, it’s a long-term phase that can easily stretch 25 to 30 years. Treating it like a brief holiday creates a serious mismatch between what’s actually needed and what’s been saved. Here are some key ways we often get it wrong:
1. We Focus on Life Expectancy, But Ignore Longevity Risk
Most retirement plans are built around average life expectancy typically 75 to 80 years. But averages can be deceptive. There’s a real chance you’ll live well beyond that, especially if you’re healthy and financially stable. The real risk isn’t an early death it’s living longer than expected without enough money to support those extra years. Planning for the average simply isn’t enough.
2. We Misjudge the Real Cost of Inflation
Spending ₹60,000 a month today? In 20 years, with 6% annual inflation, you’ll need nearly ₹2 lakh a month just to maintain the same lifestyle. The problem? Most retirees rely on fixed income sources pensions, FDs, conservative investments that don’t keep pace. Your purchasing power slowly erodes, and you don’t even realise it until it’s too late.
3. We Overestimate the Safety of Low-Return Investments
Many retirees rush into fixed deposits thinking they’re safe. But earning 5% post-tax while inflation runs at 6% means your money is shrinking in real terms. You’re losing value every year. Over 30 years, this quiet drain is more damaging than short-term market swings.
4. We Overlook Medical Costs
Healthcare inflation in India is brutal. A ₹2 lakh emergency today could easily cost ₹8–10 lakh in 20 years. One hospitalisation without proper health insurance or a dedicated medical fund can wipe out years of savings. It’s not optional it’s essential to plan for it.
5. We Stop Thinking About Income After Retirement
Many people assume retirement means the end of earning no more work, no new income. But with the possibility of living 25–30 years post-retirement, relying only on your savings can quickly become risky. Without any income sources like part-time work, rental income, or smart investments, your retirement fund takes all the strain and may not last as long as you need it to.
– Rethinking Retirement: Planning for 30 Years, not 10
If you’re retiring at 60 with possibly 30 years ahead, it’s not a short break it’s a long financial journey. Relying only on FDs, EPF, or low-return options won’t cut it. You need a smarter, balanced strategy one that protects your capital, enables growth, and offers steady, flexible income. It’s not about being overly cautious; it’s about staying ready for a long, unpredictable phase of life.
Start with the “3-Bucket Approach” to Organise Your Retirement Funds
– Bucket 1: Immediate Expenses (Years 0–5)
The first step in retirement planning is securing the first 5 years without income. This short-term bucket cushions your transition and avoids early stress. Prioritize safety and liquidity—use savings accounts, short-term FDs, or liquid mutual funds. Cover essentials like bills, EMIs, premiums, and some leisure. Don’t forget a medical buffer. Keeping this pool separate protects your long-term investments and brings confidence to the early years of retirement.
– Bucket 2: Mid-Term Needs (Years 5–15)
After covering the first few years, focus on years 5 to 15 of retirement. This mid-term bucket supports your lifestyle while managing inflation and evolving needs. Invest with moderate growth in mind—balanced or hybrid mutual funds, medium-duration debt funds, or a mix of equity and debt. Use this pool for larger expenses like home repairs, travel, or rising healthcare costs. It helps you stay on track without touching long-term investments too soon.
– Bucket 3: Long-Term Growth (15+ Years)
The final bucket covers the later years of retirement—beyond year 15—when expenses may rise and flexibility drops. With time on your side, invest in higher-growth options like equity mutual funds or index funds. This pool benefits from compounding and buffers against inflation. It’s not just about money—it’s about preserving independence and dignity. Together, all three buckets help you manage, grow, and draw down your savings with purpose across decades.
Conclusion:
Retirement isn’t a finish line it’s a financial marathon that can span 25 to 30 unpredictable years. The old formulas don’t work anymore. Simply saving isn’t enough. You need to plan how to use that money wisely, across time, through changing needs and rising costs.
By shifting your mindset and using a structured approach like the 3-bucket strategy, you’re not just building a nest egg you’re building a system that supports your lifestyle, absorbs shocks, and protects your independence well into your 80s and 90s.
It’s time to stop planning for retirement as an event. Start planning for it as a decades-long journey one that deserves just as much thought, intention, and care as any career or major life goal.
To understand more on the topic as well as to start investments please feel free to contact us:
Phone: +91-9324609115
E-mail: team@richvikwealth.in
The article is authored by Ms. Ritika Sharma from Team RichVik.