Easiest way to retire early with Rs 1 lakh monthly pension

Dec 19, 2022 Rajeev Kumar

Everyone wants to retire early. But retiring without enough money could land you in trouble. Here’s the 1% formula to retire by 45 with Rs 1 lakh monthly pension.

In the book, ‘SimplyMutual: the 1% formula to gain your financial freedom’, author Deepak Mullick explains this awesome formula.

1% formula is an approach to build a corpus over 15 years that would give you a sustained pension equal to 1% of your corpus. 1% formula is an approach to build a corpus over 15 years that would give you a sustained pension equal to 1% of your corpus.

Corpus Required

As per 1% formula, If you want a monthly pension of Rs 1 lakh after 45 years, you should build a corpus of Rs 1 crore by the age of 42. As per 1% formula, If you want a monthly pension of Rs 1 lakh after 45 years, you should build a corpus of Rs 1 crore by the age of 42.

The author has added extra three years as a cushion for market uncertainties.

Over the time, the returns delivered by Mutual Funds will exceed the percentage of withdrawals. Over the time, the returns delivered by Mutual Funds will exceed the percentage of withdrawals.

The 1% Formula

If you accumulate a corpus of Rs 1 crore in 15 years and start withdrawing Rs 1 lakh per month, the remaining of the corpus would continue to grow if you remain invested. If you accumulate a corpus of Rs 1 crore in 15 years and start withdrawing Rs 1 lakh per month, the remaining of the corpus would continue to grow if you remain invested.

Why 15 years?

The author suggests 15-year time frame for investing to take into account regular ups and downs in the market, or market cycles. The author suggests 15-year time frame for investing to take into account regular ups and downs in the market, or market cycles.

Want to read more about the 1% Formula to retire early and become financially free? Want to read more about the 1% Formula to retire early and become financially free? Learn more