HDFC MF

Weekend Bytes
A weekly series from HDFC Mutual Fund

Early Retirement roadmap:

Navigating with Mutual Funds

hdfcfund.com
Weekend Bytes | February 2024

Retiring early is a dream for many, while it’s a goal that requires
careful planning and disciplined investing. The FIRE (Financial
Independence, Retire Early) Movement has gained traction in
recent years, inspiring individuals to pursue financial
independence and retire Early. While traditional retirement
plans often revolve around pensions and Provident Fund
accounts, investing in mutual fund can offer an alternative
route which can help to achieve early retirement^.

^ Early retirement should not be considered as retiring from work when you are in your 40s
or 50s. Herein, the term refers to holding a large enough corpus with which you can be
reasonably sure to take care of your financial needs for the rest of your life. This sum of
money, ideally diversified across various asset classes, needs to be sufficient enough to pay
for all your needs in the absence of an income, and very importantly, can provide you the
freedom to choose the way you wish to live your life from a financial perspective.

Retirement planning at the age of 60-65 can be a daunting task, while

also could result in curtailing one’s current lifestyle. A strategic approach
from the early stage of your career is crucial for aspiring to retire early.
Here is what you should consider before retiring early.

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Some Factors to consider:

1 Your Current Monthly Expenses

2 Your Current Lifestyle and whether you wish to improve it

3 Money to meet sudden emergencies

4 No. of years upto retirement

5 Your Current amount of Wealth

6 Expected Inflation

7 Expected returns from your corpus. Remember your equity

exposure will have a role to play in this.

8 Dreams in your retired life

9 Priority to clear all outstanding debts before retirement

10 Any other anticipated expenses/ pending Goals

It would take a few rounds of discussion

with an investment expert for you to better
understand your target retirement corpus!

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Some Thumb Rules

Rule of 4% - This refers to the withdrawal rate from your retirement

corpus per annum. For instance, if you have a retirement corpus of Rs. 4
Crore, then as per this rule of thumb it may be ideal to withdraw upto Rs.
16 lakh a year, which works out to a monthly withdrawal of Rs. 1.33 lakh.
Would this be enough for you when you retire?

Rule of 25 - According to this rule, you may need a retirement corpus

which is 25 times your yearly expenses at the time of retirement. If you
observe carefully, the Rule of 25 is actually the inverse of Rule of 4%.

Keeping the math aside, the key for younger investors aspiring to retire
early, is to maintain a balance between one’s current lifestyle and saving
for the future. If you are thinking of an early retirement, you may wish to be
conservative and keep a good enough buffer while estimating your
retirement corpus

Rule of 72 - Divide 72 by your expected annual rate of return to estimate

how many years it will take for your investments to double in value.

Key Takeaways
Start Early Invest Regularly Stay Invested

Note: There is no guarantee/assurance that the above rules will provide an accurate
retirement corpus.
Investors are advised seek professional advise before
taking any financial decisions.

Plan today for your Early Retirement!

Invest in HDFC Retirement savings Fund!

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THIS PRODUCT IS SUITABLE FOR INVESTORS

NAME OF SCHEME RISKOMETER#
WHO ARE SEEKING*

HDFC Retirement Savings • A corpus to provide for pension in the form of

Fund- Equity Plan
An open ended retirement solution oriented
scheme having a lock-in of 5 years or till
retirement age (whichever is earlier).
income to the extent of the redemption value of their
holding after the age of 60 years
• Investment predominantly in equity and equity
related instruments.

HDFC Retirement Savings
Fund- Hybrid-Equity Plan
An open ended retirement solution oriented
scheme having a lock-in of 5 years or till
retirement age (whichever is earlier).
• A corpus to provide for pension in the form of income
to the extent of the redemption value of their holding
after the age of 60 years.
• Investment predominantly in equity and equity related
instruments & balance in debt and money market
instruments.

HDFC Retirement Savings
Fund- Hybrid-Debt Plan
An open ended retirement solution oriented
scheme having a lock-in of 5 years or till
retirement age (whichever is earlier).
• A corpus to provide for pension in the form of income
to the extent of the redemption value of their holding
after the age of 60 years.
• Investment predominantly in debt and money market
instruments & balance in equity and equity related
instruments.

*Investors should consult their financial advisers, if in doubt about whether the product is suitable for them.
# For latest Riskometer, investors may refer to the Monthly Portfolios disclosed on the website of the Fund viz. www.hdfcfund.com

Views expressed above are indicative and should not be construed as investment advice or as a substitute for financial planning.
Due to the personal nature of investments, investors are advised to consult their financial advisors before investing

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS,

READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.

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