Retiring in the next five years: a money checklist

How much money do I need to retire in India?

You need enough that withdrawals rising with inflation last 30 years or more, which for most people is 25 to 30 times their yearly expenses in retirement after counting any pension. Treat that multiple as a first check, not an answer.

Five years out is the right time to do this properly, because there is still time to close a gap by working a little longer, saving more or spending less, and each of those is far easier before retirement than after it.

How to check your number

1. List your expenses in retirement. Start from today's spending, remove what ends (commuting, EMIs, children's fees) and add what starts (health insurance premiums, travel, help at home).
2. Add up what you will have. EPF, NPS, PPF, mutual funds, deposits, gratuity and leave encashment. Our EPF calculator estimates your EPF balance at 58 and your EPS pension.
3. Compare the two. Our retirement calculator shows whether your corpus lasts, and what to change if it does not.
4. Allow for health costs. Medical inflation runs ahead of general inflation. Keep a separate reserve over and above your health policy.

How should I invest when I am five years from retirement?

Move gradually from a growth portfolio to a bucket plan: safe money for the next two years, steady money for the years after, and equity for growth over the decades ahead. Retirement can last 30 years, so selling all your equity at 60 leaves the corpus exposed to inflation for the rest of it.

How to make the move

• Five years out: decide the bucket sizes. Stop adding new money to equity once the growth bucket is the right size.
• Three years out: start building bucket 2 from new savings and from equity in years when markets are up.
• One year out: fill bucket 1. If markets are down, take the time to fill it from savings rather than selling equity at a low.
• Watch capital gains tax as you move money. Spreading sales across financial years uses the yearly tax-free limit on long-term equity gains more than once.

Is EPF withdrawal at retirement taxable?

Usually not: under the Income-tax Act, 2025, your EPF balance is exempt when withdrawn after five years of continuous service, including service with earlier employers whose balance you transferred. Interest on employee contributions above the yearly threshold is taxed each year as it is credited, so it does not add tax at withdrawal.

• When you can withdraw. The full balance can be withdrawn on retirement at 58. If you stay in service beyond that, or have not yet claimed, interest continues to be credited for a period, so check your account rather than leaving it idle for years.
• Merge old accounts first. Transfer balances from previous employers into your current UAN well before retirement. An untransferred account can break the five-year count and slow the claim.
• Check the EPS pension. If you were a member of the Employees' Pension Scheme, you get a monthly pension from 58, based on your pensionable service and salary. Our EPF calculator estimates it.
• Update your KYC now. Bank account, PAN and Aadhaar must match your EPFO records, or the claim stalls.

How much of my NPS can I withdraw at 60?

Under PFRDA's exit rules as amended in December 2025, a non-government subscriber can take up to 80% of the corpus as a lump sum at 60 and must use the rest to buy an annuity. Government sector subscribers keep the earlier split of up to 60% as a lump sum and at least 40% in an annuity.

• Small corpuses can be withdrawn more freely. Check the current thresholds in your NPS account before you exit.
• You can defer. Both the lump sum and the annuity purchase can be put off up to age 85, and the money stays invested meanwhile.
• Plan the annuity. Annuity income is taxed at your slab rate, and most annuities cannot be undone. Compare a few options, including one that returns the purchase price to your nominee.
• Check the tax on the lump sum. Part of the lump sum is tax-free. Check how the rest is treated under the current rules before you decide how much to take.

Are gratuity and leave encashment taxable at retirement?

For government employees both are fully exempt; for others, gratuity is exempt up to ₹20 lakh and leave encashment up to ₹25 lakh, over your working life. Anything above those limits is taxed as salary in the year you receive it.

• Ask HR for an estimate of both amounts a year before you retire, so they can go into your bucket plan.
• The limits apply across all employers over your career, not per job. Amounts exempted earlier reduce what is left.
• If a large taxable amount falls in your last year of salary, check whether relief for arrears and lump sums in salary applies.

Should I buy health insurance before I retire?

Yes, at least three to five years before, because your employer's policy usually ends on your last day and waiting periods for existing conditions can run up to three years. Buying while you are still covered at work means those waiting periods are over by the time you depend on your own policy.

• Buy a family floater or individual policies with a base cover that fits the hospitals you would use, and add a super top-up for large claims at low cost.
• Ask whether your employer lets retirees continue on the group policy, and at what price. Treat it as a bonus, not a replacement.
• Declare every condition honestly. A claim rejected for non-disclosure at 65 is far harder to recover from than a higher premium today.

Our insurance planning guide covers how much cover to buy.

How do I create a monthly income from my retirement corpus?

Combine a pension or annuity, interest from safe schemes, and a systematic withdrawal plan from debt or hybrid funds, refilled from equity every year or two. No single product does the whole job well.

• Senior Citizens Savings Scheme. Open to those aged 60 and over, with a deposit limit of ₹30 lakh per person and interest paid every quarter. The rate is set by the government each quarter: 8.2% a year for October to December 2026. The interest is taxed at your slab rate.
• Systematic withdrawal plan. A fixed monthly amount from a debt or hybrid fund. Only the gain in each withdrawal is taxed, which usually makes it more tax-efficient than interest. Our SWP calculator shows how long a corpus lasts at a given withdrawal.
• EPS pension and NPS annuity. Small but guaranteed for life. Treat them as the floor of your income.
• Keep the rate sensible. Withdrawing much more than 4% of the corpus in the first year, rising with inflation, raises the risk of running out.

Where we fit, and where we do not

Invsify is a SEBI registered investment adviser (INA000020572). We are fee-only: our fee is ₹8,999 a year, fixed, and we take no commissions. We check your corpus, design the bucket plan and withdrawal order, and review it with you every year. You invest in your own name.

We are not the right choice for everything around retirement. We do not file tax returns, so you will still need a chartered accountant or a filing service. We do not sell annuities or insurance, though we will tell you how much cover you need and which kind of annuity fits. And if your retirement is fully funded by a government pension and you only want a place to park savings, a direct plan platform or a bank deposit may be all you need.