Balancing Acts: Safe Withdrawal Rates in the Indian Context

31 Pages Posted: 5 Feb 2024

See all articles by Rajan Raju

Rajan Raju

Invespar Pte Ltd

Ravi Saraogi

Samasthiti Advisors

Date Written: January 17, 2024


The determination of a safe withdrawal rate (SWR) is a cornerstone of retirement planning and addresses the critical question of how much can be safely withdrawn annually from a retirement corpus without risking its premature depletion. This study adds to the empirical evidence on SWR by providing an out-of-sample and a comprehensive analysis adapted to the Indian context. The often cited 4% rule is not appropriate in India's context; rather a range between 3.0% and 3.5% is more appropriate. Our analysis reveals that while portfolios with higher equity allocations can potentially increase safe withdrawal rates, they also significantly increase the risk of portfolio failure, particularly for withdrawal rates greater than 3.75%. Taxes on fixed deposit interest act as significant drags on the failure rates of `safe' all deposit portfolios. In addition, we highlight the importance of gold as a diversifying asset, which can mitigate some market-related risks in traditional two-asset class portfolios.

Keywords: Retirement planning, Safe withdrawal rate, Real returns, Inflation adjusted returns, India asset returns, Portfolio construction, Financial planning

JEL Classification: G11, G17, C15

Suggested Citation

Raju, Rajan and Saraogi, Ravi, Balancing Acts: Safe Withdrawal Rates in the Indian Context (January 17, 2024). Available at SSRN: or

Rajan Raju (Contact Author)

Invespar Pte Ltd ( email )


Ravi Saraogi

Samasthiti Advisors ( email )

12, Kalakshetra Road
Chennai, 600041


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