Prithivi, 49, wanted to ensure he retires at 58. His experience in the recent market fall made him seek professional guidance.

Prithivi works in an IT services firm at Bangalore. His job is relatively secured, as he continuously upgrades his skills and works in a specific domain.

He has been investing in mutual funds since 2009. Most of his MF investments are through the systematic route. He is a disciplined investor and built a sleek portfolio with 12 schemes. He invests ₹1.8 lakh per month across eight schemes. The current portfolio value is ₹2.2 crore.

He experienced portfolio returns fluctuating from 18 per cent to the current 14.5 per cent in the last 24 months. He is comfortable with market volatility and is willing to participate during market corrections with his systematic investments to benefit from rupee cost averaging.

He is now looking at preserving his wealth prior to his retirement, and systematically lock in gains when the returns are relatively higher.

Review, recommendations:

It is important to understand his thought process which does not indicate panic or low risk tolerance. His desire to lock in gains at higher valuations stems from his experience and evolving financial priorities, here it is his retirement. This can be addressed in two parts. One is identifying his retirement corpus, and the second part is addressing his emotional need of gradually shifting gains to fixed income nearing retirement.

Identifying his retirement corpus: Though there are mathematical calculations to get the corpus, there are many economic assumptions used in arriving at the corpus. Hence, in Prithivi’s case, it was advised to work on the reverse.

If he continues to invest ₹1.8 lakh per month till 58, he will be accumulating ₹7.51 crore at 10 per cent expected return; ₹9.85 crore at 14 per cent expected return; and ₹12.99 crore at 18 per cent expected return in the next eight8 years. This kind of wealth will help him to withdraw Rs ₹1.23-2.12 lakh of retirement income at current cost till his life expectancy of 90 years.

It is a usual behaviour of most investors, to be more cautious while nearing retirement, and be concerned about major market corrections that could potentially affect the withdrawal. Hence it was suggested to work on a combination of fixed income investments with safety of capital, towards a fixed withdrawal through interest pay-outs and a basket of equity mutual funds to address the inflation-adjusted expenses.

Shifting gains to fixed income: As the returns thus far had been in a range, it was advised to target 12 per cent returns to arrive at the corpus. As and when the returns at a scheme-level move substantially higher than this expected number of 12 per cent, the excess returns need to be moved to either debt or a balanced advantage fund depending on other scenarios like market valuations, future prospects of returns, time horizon available and so on. In Prithivi’s case, he was also advised to keep a minimum 40 per cent in equity MF (and a maximum of 60 per cent) at the time of his retirement. Currently, his mutual fund portfolio is at 90 per cent equity that drives him to think of ways to preserve the wealth to be generated and protect his corpus while nearing retirement.

It would be very difficult for anyone to exit at the “Right Time” to avoid market fall. But a sensible approach would be to set an appropriate return expectation and an asset allocation at the time of retirement. This would help one to focus on the right action items based on one’s own rule book rather than just on market swings. It is suggested to work on an asset allocation of 70:30 in favour of equity in the next three-four years and slowly moving to 60 per cent in the subsequent two-three years would help him reduce the future uncertainty. Market valuations will be carefully considered while managing the asset allocation.

It should also be remembered that retirement is not a day when equity exposure should be moved to zero. There should be certainty of withdrawal from fixed income for the short term and there should be equity participation to address longevity and sufficiency of retirement income that tames inflation.

The author is the Principal Officer at Ploutus Asset Services LLP, a SEBI registered investment advisory firm. https://ploutus.in

Published on June 6, 2026