Old money rules are broken: 15 financial planners on how investing has changed
Kalpesh Ashar
Founder, Full Circle Financial Planners
Old assumption
Do-it-yourself approach scores over paying for advice to achieve goals.
New reality
There are no ‘free lunches’ in finance, it pays to pay for advice.
I have observed a meaningful shift in investors’ mindsets. Clients who were once completely averse to paying advisory fees have evolved over time. Indian investors have matured significantly over the years and have started recognising that there is no “free lunch in finance”. The professional fees they pay are justified or validated by the value of receiving unbiased and informed financial advice. From investors’ perspective, there has been the belief that “advice is always free” and “I know everything”. However, in the last 15 years, for advisers, the concept of being paid professional fees as fiduciaries has been gradually growing. Investors now see the value of having an expert by their side to guide them along the right path in their financial journey.
Shalab Gupta Bibhab
Founder, Bibhab Capital
Old assumption
Estimate required retirement corpus assuming 6% inflation.
New reality
Factoring in a much higher rate is necessary, as annual healthcare, education inflation exceed 10%.
Inflation today is far more severe. Fifteen years ago, planners worked with 5-6%, but real-life urban inflation now runs closer to 7-9%, with essentials rising even faster. Annual school fees, that once ranged from Rs.40,000–60,000 now touch `3-4 lakh, amounting to a nearly 10% education inflation. Medical costs climb 10-12% a year, driven by advanced treatments and longer life spans. These shifts have reduced the adequacy of long-term savings. Retirement corpuses calculated using outdated assumptions often deplete early. Fixed deposits, which once offered 8–9%, now deliver only 6–6.5% pre-tax, often resulting in negative real returns.
Mahavir Chopra
Founder, Beshak.org
Old assumption
A base cover of Rs.5 lakh is sufficient for a nuclear family.
New reality
Post Covid-19, such low-value policies are inadequate.
Don’t just go with numbers, like Rs.5-10 lakh, simply because they sound right. Think ahead. Imagine yourself at 55 or 60: what kind of medical expenses might you be looking at? Buy the cover that feels right for you today, then factor in an annual healthcare inflation of about 10% over the next 20 years. That is the minimum cover needed. In addition, serious major diseases can be extremely expensive and unpredictable. That is why it’s also worth adding a top-up cover to this base sum insured. The combined large cover will protect you against those rare but expensive situations, without having to pay through the nose for everyday coverage.
Pankaj Mathpal
Founder, Optima Money Managers
Old assumption
EMIs should not exceed 40% of takehome salary.
New reality
Rising property prices in mega cities make the limit unrealistic.
Housing affordability gap in big cities has widened sharply. Double income households are now more common than 15 years ago. For dual income couples with stable jobs and adequate emergency buffer kitty, total EMIs may comprise up to 55% of take-home pay. For those who are self-employed or working in sectors where job stability is uncertain, EMIs should stay below the 35-40% limit. Make sure that home loan EMIs do not compromise essential insurance, basic investments and emergency funds. Also, under no circumstance should non-home loan EMIs—unsecured credit such as personal loans, buy-now-pay-later and credit cards—exceed 10-15% of in-hand salary. If there are no home loans, they can be stretched to 20%, but only temporarily.
Nisreen Mamaji
Founder, MoneyWorks Financial Services
Old assumption
Equity allocation should be 100 minus your age.
New reality
Not only younger investors, even the older ones need higher exposure.
The 100 minus age rule for equity allocation is not relevant for all, for several reasons. For one, every family has very different demographics and financial necessities which cannot be looked at mechanically. Moreover, due to increased longevity, post-retirement life can now last for 30 plus years. Healthcare inflation is around 10-12% now, and returns from debt instruments can barely beat inflation. Fixed income avenues cannot sustain purchasing power over the long-term. The rule of “equity till need, not age” works better. Put simply, your equity exposure should reflect income requirements, time horizon for investment, expenses’ timeline and risk tolerance.
Preeti Zende
Founder,Apna Dhan
Financial Services
Old assumption
Allocation to gold should be 5-10% of investment portfolio.
New reality
Savvy investors may consider higher allocation.
Gold has surprised many of us with its recent rally. However, it’s important to remember that gold is a volatile asset class, much like equities. While it can provide excellent returns, it can also decline significantly and remain stagnant for years. Gold tends to perform well during periods of global uncertainty. For those who understand its volatility and prefer a balanced investment strategy, allocating around 25% of total investments to gold can be beneficial. This strategy is often referred to as the 25/25/25/25 portfolio construct, where 25% is allocated to equities, debt, gold and real estate each. During market corrections, consider increasing the allocation by an additional 1-2%.
Ravi Saraogi
Co-founder,
Samasthiti Advisors
Old assumption
Children, rent and fixed deposits will take care of retirement needs.
New reality
Retirement plans are getting more realistic.
In the past, few people sat down to create a retirement plan. The default retirement plan was children, or living off rent and fixed deposits. Now, investors have moved to explicitly planning for their retirement. Investors now calculate how much they need and by when, and work with advisers to plan a comfortable retirement using a suite of financial products. This demand for retirement planning has also led to a corresponding interest in sophisticated retirement research tailored for the Indian retiree. Financial wisdom is moving from naive retirement computations to one that make use of methodologies like simulations and safe withdrawal rates. We are moving from fixed-return assumptions to a probabilistic way of thinking.
Rachna Monga
Koppikar Founder,growyournest.com
Old assumption
Maintain an emergency fund worth 3-6 months’ household expenses.
New reality
Those in their 40s with multiple responsibilities need higher corpuses.
With an uncertain job market, it makes sense to maintain an emergency corpus worth at least 8-10 months of expenses. This should cover all essential spends, including parental care. The guideline is especially important for mid-level executives or those aged 45 and above, who typically juggle multiple responsibilities such as home loan equated monthly instalments (EMIs), household expenses, caring for parents, children’s education, and planning for retirement. For those just starting their careers, a six-month contingency fund is adequate, but it should be reviewed as financial responsibilities grow.
Roshni Nayak
Founder, GoalBridge
Old assumption
Term insurance cover should be equal to 10 times your annual income.
New reality
This coverage can be inadequate for many.
An oft-repeated rule of thumb is that life cover should be 10-15 times the annual income of an individual. However, this does not hold true particularly for individuals in their late 30s or early 40s who are at the peak of their careers. They might have already accumulated huge financial assets thanks to working stints abroad and disciplined investing from an early age. A more genuine and accurate calculation of life cover should be based on a need-based analysis which takes into account the outstanding loans, essential financial goals and cost of family sustenance till the life expectancy of homemaker spouse. This needs a periodic review though.
Abhishek Kumar
Founder, SahajMoney
Old assumption
Retirement corpus will last the course if withdrawals are made at the rate of 4% per annum.
New reality
4% withdrawal rate is unsustainable.
In a VUCA (Volatile, Uncertain, Complex and Ambiguity) world, the 4% withdrawal rule needs a revision. It might work in developed countries with 2-3% inflation and strong social safety nets. However, compared to this, India’s 6% general inflation, 12-14% medical inflation, and lack of guaranteed pensions make 4% withdrawal rate unsustainable. Our experience suggests that in such a scenario, 3-3.5% as a withdrawal rate is more sustainable. Put simply, this means that you need a retirement corpus equal to at least 25-33 times your annual expenses. The exact rate of withdrawal, however, would depend on your age at retirement, life expectancy and portfolio composition, but a 3-3.5% withdrawal rate can provide genuine safety to a retiree.
Rohit Shah
Founder & CEO,GYR Financial Planners
Old assumption
Sticking to the basics makes for a good financial plan.
New reality
Financial planning is more complex, as Gen Z values experiences more than possessions.
Fifteen years ago, financial planning was easy. People simply bought insurance or mutual funds and felt secure. Today, it is very different. It is not about products, but about handling our emotions and planning for our real-life goals. In 2010, passive investing was hardly known. Now, it holds nearly one-fifth of all mutual fund money. The deeper message is clear: financial freedom matters more than showing wealth. Gen Z wants control over their lives, not just a big bank balance. SIPs have become part of everyday life, just like Bajaj scooters, Colgate or Maruti once were for earlier generations. But priorities have changed. People value experiences more than possessions. True financial wisdom today means building flexibility to live life your way.
Eela Dubey
Co-founder,EduFund
Old assumption
Estimate required higher education corpus by assuming 6% inflation.
New reality
Education inflation is close to 10-12%; investment planning must also factor in currency depreciation.
Relying on consumer inflation (6%) for education planning is a mistake; education inflation in India is historically closer to 10-12%. If you are saving for foreign studies, factor in an additional 3-4% for currency depreciation (INR vs USD/GBP). However, parents should not be fixated on a generic, fear-inducing number like Rs.10 crore. The new normal isn’t a specific corpus size, but rather the discipline of planning with doubledigit inflation in mind. To put it in perspective: generating a Rs.10 crore corpus over 18 years (from a child’s birth) would require a monthly SIP of roughly Rs.50,000 at an aggressive 15% CAGR (compounded annual growth rate). This is out of bounds for many Indian families. The focus should be on starting early and mapping the corpus to the specific course and geography, rather than chasing an arbitrary benchmark.
Suresh Sadagopan
Founder, Ladder7 Financial Advisories
Old assumption
Retirement age is 58-60 years.
New reality
Many employees are being eased out much earlier; the concept of FIRE, too, is catching on.
While investing during working years to create retirement portfolios, we should assume a working age till 50 years as many people want to retire early. Moreover, many employees are being eased out of their jobs in their late 40s to early 50s, in a number of cases. Artificial Intelligence (AI), as we know, is playing a role here too. Intense competition and cost pressures are making companies trim their higher cost human resources. Hence, when we plan for retirement, income earning years should be only up to 50 years.
Nitesh Buddhadev
Founder, Nimit Consultancy
Old assumption
For FIRE, retirement corpus should be 25X annual expenses.
New reality
Retirement kitty for FIRE should be 35X.
For years, many financial advisers as well as investors aiming for FIRE (Financial Independence, Retire Early) have conventionally planned for a corpus that is equal to 25 times annual expenses. But over the last 10 to 15 years, lifestyle inflation, rising medical costs and longer life expectancy have changed this thought process. The right corpus size has become bigger over the years. A more realistic target today is closer to 35 times annual expenses, along with a prudent withdrawal rate of 3 to 3.5%. With a balanced portfolio of 45% equity, 45% debt and 10% gold, this level of corpus can comfortably sustain a person for 40 to 45 years and provide true long-term financial independence.
Vishwajeet Goel
Head, Pensionbazaar
Old assumption
Retirement planning can start in your 40s.
New reality
Your retirement plan should begin with your first salary, not mid-life.
For years, retirement planning was seen as something you start planning in your 40s, after major life goals like education or marriage are out of the way. Over the last 15 years, rising life expectancy and higher lifestyle costs have made early investing critical. A 25-yearold today needs barely one-fourth the monthly SIP that a 40-year-old requires to reach the same retirement corpus. That’s the power of compounding. Low-cost products like the National Pension System (NPS), which allow young earners to start small but stay consistent, are easily accessible. Starting early builds a much larger compounding runway, reduces reliance on debt later, and cushions against market cycles.
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