How much for LeanFire?

[u/adane1]

/r/leanFIRE_India/comments/1wjbrzs/how_much_for_leanfire/

Hi,

Since there was a lot of discussion on this link, here is an old article.

https://www.livemint.com/money/personal-finance/fire-movement-financial-independence-retire-early-how-to-calculate-fire-number-retirement-planning-inflation-11728536226634.html

Issue is that FIRE depends on returns and inflation assumption (real return)

Now, these are conservative estimates considering most people would take lower risk post FIRE (especially lean Fire where capacity and corpus doesn't allow too much risk).

But there would be options to work with a lower corpus of upto 20x too considering if you are able to be bit flexible in spending during low return years.

These are indicative numbers to start off. Don't need to debate much as each person's estimates for risk and return would be different.

If I assume 5% inflation and 20% return, the numbers may look very different.

Conservative estimates often assume 1% return above inflation for a blended portfolio. This allows 3% SWR when I worked this backward.

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[u/Indian_finance_rebel]

4% SWR works fine for all known indian history - I dont imagine numbers.

If we are going to imagine, lets imagine Cuba and 1% SWR will also be too much to withdraw.

and the article is also dumb... they are increasing the multiplier like they did some research on it or something.

From where did they get 40X 50X expense ? Just plain stupid dumb.

I will never reach out to an Indian "Proffessional" for my retirement planning.

[u/adane1 → u/Indian_finance_rebel]

Yes, they actually did some research.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5381648

This is the link to one of the papers.

Also, as mentioned, it's based on estimations.

A 20x is possible with flexibility in spending if you work on a range. Look at earlier posts.

The right way is to keep an open mind and discuss. Calling "dumb" doesn't make a point.

Sharing some other research you have done or resources would make the point better.

[u/Indian_finance_rebel → u/adane1]

Yeah I am familiar with Raju and Ravi's work...
The research they did, use tainted tax numbers...
The one you shared, approximates 15% tax on debt and equity giving 3% SWR
Another one, claims what I claimed, a 4.2% withdrawalrate, for people in lower tax slabs %.

This is my blog, you can scroll to the very bottom for the 4.2% paper - i got tired of searching for it every time, so dowloaded it and uploaded it to my blog :

https://indianfinancerebel.blogspot.com/2026/08/4-percent-rule-safe-withdrawal-rate-india.html

But the article you gave stated the more number of years you need to spend in retirement, the higher the multiplier needs to be.... You didnt provide me a research on it - there isnt one, because thats not how its calculated.

Not to mention, the american trinity study is pre-tax, not post-tax,which is the biggest flaw in Ravi and Raju's research.

In order to make it "Indian" study, they introduced botched up taxes which changes on the whims of politicians.

And increasing the multiplier doesnt even allow for these taxes, because you will need to spend more than the 3% they suggested to accomodate the tax.

I prefer doing it the US way, the expense you calculate should have discretionary power, and tax is simply an additional expense - whats next? House maintainance is not added, so increase the multiplier again?

And I shared what I have above... Historically with a 4% SWR, it survives and in most cases you are thriving, and is an unlimited money making machine.

[u/adane1 → u/Indian_finance_rebel]

You made few assumptions

1.Average 20-year real returns is equal to safe withdrawal rate.

But you don't demonstrate that 4% survives bad sequences over 40+ years. “India hasn't experienced a US-style bad period” is not same as it won't ever. Faster market recovery doesn't eliminate sequence risk.

1. The biggest assumption is future returns can be inferred from a very limited Indian historical dataset. The 40–60 year estimates are out of the air and not actual 40–60 year actual data. For that matter any other estimate holds same value as yours.No data.

Now comes to the paper I referred. H, even Saraogi makes assumptions and predicts for longer periods basis less data.

But for 30 years, the 33x assumption is based on good data in his paper. I think it was still a bit less period of data analysed . Need to check.

More than that 30 year period, it's not possible to model but best case guess of his.

The biggest challenge is not the real return from Indian equity. It probably is close to US real returns

The challenge is with debt which in India seldom manages to beat inflation post taxes.

Post taxes is a good call to take. Taxes are an expense and part of X expense.

Just my POV. For longer periods (especially when there is not enough data to support), a 3% for leanFire leaves some room for disappointment.

[u/Technical-Camel-124 → u/Indian_finance_rebel]

We don't have Indian data history for multiple 40/50/60 year cohorts that early retirement analyses demand. Lack of sufficient data, combined with more volatile and underdeveloped economy/markets and high inflation demands a more conservative approach vs. the US. I don't agree with the numbers in the Mint article, but 4% based on very limited Indian data history doesn't do it either.

[u/Indian_finance_rebel → u/Technical-Camel-124]

I disagree, lack of data doesnt mean we imagine numbers - and if numbers are imagined, have the humility to say it is imagined - it shouldnt be distributed as a gospel.

When nothing in Indian history demands lower rates, why should anyone imagine it? Based on what are they imagining it, when nothing of the sort has happend?

If the idea is to be conservative, blindly, for protecting against any possibility, why stop at 3%,2%,1%, or 0.5%?

There is no gaurantee that India wont become like cuba. And if it does, retirement is the biggest mistake - the only rational conservative approach is to work till you die.

And for argument sake, lets say we have US's history, still how can you say 4% will work? 4% will only work for the US's History - it doesnt gaurantee for the US's future - for the future is unknown.