Is ₹80 Lakh in Bank FDs Enough for Retirement After 5 Years? Experts Explain the Real Math

By Siddhi Jain | Dec 9, 2025, 20:54 IST

Many individuals today aim for early retirement, hoping to pursue hobbies or enjoy a stress-free life after stopping full-time work. But the most important question remains: how much money is enough to retire comfortably?
A 50-year-old individual planning to retire in five years currently has ₹80 lakh parked in fixed deposits. His monthly household expense is around ₹60,000. The obvious question he asks is — Will ₹80 lakh be sufficient for retirement?

Financial experts say the answer depends on inflation, expected returns, withdrawal discipline, and how efficiently the retirement corpus is invested.

Inflation Will Push Monthly Expenses Higher Every Year

One of the biggest factors many people ignore is inflation. After retirement, your expenses do not remain constant. Prices of food, healthcare, fuel, and essential services continue to rise.

Experts estimate an average inflation rate of 6% per year. This means:

A current monthly expense of ₹55,000 can easily rise to ₹80,000 per month within a few years.
Medical and healthcare costs increase even faster, putting additional pressure on savings.

Sachin Jain, Managing Partner at Scripbox, explains that inflation silently eats into the purchasing power of retirees, making long-term planning essential.

FD Returns Are Too Low to Beat Inflation

While bank FDs offer safety, their returns are barely above inflation. Assuming a 6.5% annual FD return:

To sustain ₹80,000 monthly expense for 20 years, you would need ₹1.83 crore as retirement corpus.
In contrast, ₹80 lakh fixed in FDs will grow to around ₹1.13 crore in five years — almost ₹70 lakh short of the target.

After accounting for taxes, the effective return from FDs falls to about 4.5%, which is significantly lower than inflation.
Colonel (Retd.) Sanjeev Govila, CEO of Hum Fauji Initiatives, notes that this slow growth means your funds may last only till age 70, after which the corpus may be exhausted.

A Balanced Investment Portfolio Is Necessary

To bridge this large gap, experts strongly recommend shifting the FD money to a diversified, balanced investment portfolio.
Such a portfolio should ideally earn 9–11% annual returns, significantly higher than FD returns.

Where Should the Money Be Invested?

Equity mutual funds → for long-term growth
Debt or bond funds → for stability
Hybrid funds → for moderate growth with lower volatility

Sachin Jain says a diversified strategy built around safety, stability, and growth can help achieve long-term retirement goals.

Debt and Hybrid Funds Offer Better Post-Tax Returns

Govila adds that debt and hybrid funds outperform FDs on a post-tax basis, especially when held for over three years.
Although market-linked products have fluctuations, long-term investments tend to average out the risks, delivering smoother returns.

With such a balanced approach, the shortfall reduces from ₹1.03 crore to about ₹55 lakh, making the goal more achievable.

Keep Withdrawals Limited to 3–4% Per Year

To ensure your retirement corpus lasts long, experts advise withdrawing only 3–4% of your corpus annually.
If you accumulate ₹1.83 crore:

A 3.5% withdrawal rate provides ₹51,000 per month
This means discretionary or luxury expenses will need to be controlled

Use the “Bucket Strategy” to Manage Retirement Money Smartly

Govila suggests using a three-bucket strategy to reduce risk and ensure stable income:

Bucket 1 (0–5 years)

FD, liquid funds, and short-term debt funds
Covers immediate, essential expenses

Bucket 2 (5–10 years)

Hybrid funds
For medium-term needs

Bucket 3 (10+ years)

Equity or hybrid funds
For long-term growth

This structure ensures that you always have money for short-term needs while your long-term investments continue to grow.

Immediate Action Needed for a Smooth Retirement

If you are planning to retire in the next five years with ₹80 lakh in FDs, experts say it’s crucial to take action now.
To overcome the current shortfall of over ₹1 crore:

Diversify your investments
Balance safety and growth
Increase exposure to equity and hybrid funds
Maintain a strict withdrawal rate of 3–4%

With proper planning, this approach can help your money last till age 75 or even beyond.