'Even ₹12 cr may not be...': CA warns against most common portfolio error in retirement planning

A growing number of affluent Indians are discovering that having several crores tucked away for retirement doesn’t guarantee peace of mind. According to CA Nitin Kaushik, the real danger isn’t insufficient wealth — it’s a poorly structured portfolio that favours excitement over stability. 

In a detailed post on X (formally twitter), Kaushik unpacked what he calls “the retirement mistake even the wealthy keep making”, arguing that many high-net-worth individuals unknowingly walk into retirement with a ticking time bomb: excessive equity exposure at the very stage of life when volatility hurts the most. 

Kaushik notes that a widespread belief continues to mislead retirees: “Even after retiring, half my money should stay in equities. That’s how wealth grows.” 

This may have been true years ago when expenses were more predictable and market movements gentler. But today, he says, retirees face sharper drawdowns and higher real costs. 

To illustrate, Kaushik gives the example of someone stepping into retirement with a ₹12-crore corpus — an amount that should ideally feel abundant. But a 25-30% market fall in the very first year can erase ₹2–3 crore instantly. Since living expenses continue regardless of the market mood, the retiree is forced to sell equities at the worst possible time. 

“That’s when the emotional damage begins,” he writes. 

Each sale during a downturn shrinks the base from which the portfolio would otherwise recover, leading to weaker compounding and faster erosion of wealth. Kaushik notes that even individuals retiring with ₹8-10 crore often find themselves feeling financially tight by their 70s — not because they spent recklessly, but because their portfolio wasn’t designed for real-world market sequences. 

The silent threat: sequence-of-returns risk 

Kaushik emphasises that volatility + fixed withdrawals = depletion risk — a combination often underestimated by investors. 

Retirement simulations, he says, consistently reveal that portfolios holding around 50% equities carry a significantly higher likelihood of running out of money, particularly for those with long retirement horizons. 

But when equity exposure is reduced to 20-30%, the risk of depletion drops dramatically while annual spending power remains nearly the same. 

“The trade-off is far smaller than most people assume,” Kaushik notes. 

According to him, this shift is not about becoming conservative but about eliminating the precise risk that destroys retirement portfolios: the sequence in which returns occur. 

A calmer path to financial dignity 

Kaushik describes an alternative: a retiree who starts with a measured mix — enough equity to stay ahead of inflation, but enough stability to avoid panic-driven withdrawals. 

Fast-forward 10 years. Markets wobble. Friends worry. Some consider part-time work again. But with a structured withdrawal plan and a low-volatility allocation, “nothing changes — not the lifestyle, not the holidays, not the financial dignity,” Kaushik writes. 

By age 80, there remains sufficient wealth for medical needs, family commitments, and generosity — hallmarks of what he calls “a peaceful, not stressful” retirement. 

Real reason some retirees sleep better 

After years of observing portfolios, Kaushik says one insight stands out: “People who sleep well in retirement aren’t the ones who took the biggest bets. They’re the ones who aligned risk with reality instead of ego.” 

These individuals didn’t chase the highest returns. They prioritised stability, dignity and time — the true assets of retirement. 

Kaushik ends with a pointed question for those nearing retirement: “Before assuming retirement money will last forever, it’s worth asking: Has anyone shown the actual odds? Or are you walking into retirement with hope instead of a plan?”