Archive · 21 Aug 2026
How a ₹4.5 Crore Corpus Could Fund Retirement Income
The article explains how a retired person might use ₹4.5 crore to create monthly income.
Keeping all the money in an FD could produce interest, but much of that income may be taxed.
A mutual-fund SWP lets the person withdraw money regularly.
Each withdrawal can contain both original money and investment gains.
Tax is generally charged only on the gains portion, according to the article.
Equity investments may also receive more favorable long-term capital-gains treatment.
The suggested plan divides the money into five buckets for different time periods.
However, the plan is meant only for people who can tolerate equity-market ups and downs.
The article says a ₹4.5 crore FD corpus at 7% would generate about ₹37.33 lakh in annual interest.
After an estimated ₹7 lakh tax bill, the reported FD income would be roughly ₹30.33 lakh annually.
A mutual-fund SWP can provide regular withdrawals while taxing only the gains portion, not the principal withdrawn.
Equity long-term capital gains up to ₹1.25 lakh annually are exempt, with gains above that taxed at 12.5%.
The proposed bucket strategy allocates ₹4.5 crore across liquid, debt, hybrid, equity-savings and pure-equity funds.
- Who
- Retirees with a ₹4.5 crore investment corpus and sufficient risk tolerance.
- What
- A comparison of FD income with a tax-efficient mutual-fund Systematic Withdrawal Plan and bucket strategy.
- When
- Across retirement years, with proposed investment buckets covering year one through year eight and beyond.
- Where
- Not specified in the article.
- Why
- To generate regular retirement income, reduce taxes and potentially increase withdrawals with investment growth and inflation.
Fixed-Deposit Approach
Mutual-Fund SWP Approach
Tax burden
Fixed-Deposit Approach
An FD can push retirement income into the 30% tax slab, according to the article, resulting in a reported tax bill of around ₹7 lakh.
Mutual-Fund SWP Approach
An SWP taxes only the gains portion of withdrawals, not the principal, and equity gains may receive lower long-term capital-gains taxation.
Income and growth
Fixed-Deposit Approach
An FD offers interest income based on the stated 7% rate but does not provide the proposed exposure to market-linked growth.
Mutual-Fund SWP Approach
Mutual funds can combine regular withdrawals with potential capital growth and may allow income to rise over time to help address inflation.
Risk
Fixed-Deposit Approach
The article presents the FD comparison without highlighting equity-market volatility as a risk to the principal.
Mutual-Fund SWP Approach
The bucket strategy is recommended only for investors with a strong tolerance for equity-market volatility.
- Corpus discussed
- ₹4.5 crore
- FD interest assumption
- 7% annually
- Reported FD interest
- About ₹37.33 lakh over one year
- Reported FD tax
- Around ₹7 lakh under the new tax regime
- Reported post-tax FD income
- Roughly ₹30.33 lakh annually
- Equity long-term capital-gains exemption
- Up to ₹1.25 lakh in a given year
- Tax rate above exemption
- 12.5% on the stated gains above ₹1.25 lakh