India’s wealthy retirees - professionals as well as entrepreneurs - are beginning to rethink an age-old financial instinct: saving relentlessly for the next generation. A quiet but significant shift is underway in wealth management circles, where advisers are nudging senior citizens to spend more on themselves — prioritising quality of life over leaving behind large inheritances.
For decades, retirement planning in India has been shaped by frugality and legacy-building. But that mindset is evolving as longer life expectancy, financially independent children and changing social dynamics alter the contours of post-retirement finances. Wealth managers say a growing number of high-net-worth individuals are embracing “decumulation”—the strategic drawdown of savings to fund a more fulfilling retirement.
The idea has global resonance, popularised by the “Die with Zero” philosophy of hedge fund manager Bill Perkins, that advocates maximising life experiences rather than accumulating unused wealth. In India, too, fund managers and advisers report rising acceptance of this approach, particularly among retired corporate executives and affluent families.
Funds unlocked
Anindya Paulchaudhuri, co-founder and group CEO of Wealthapp Group of Companies, which advises over 200 retired senior corporate leaders, said the traditional inheritance-driven model is steadily loosening its grip.
“The Indian retirement story was long defined by a silent pact—parents living a diminished life to ensure a large inheritance for their children. That is now changing,” he said.
He cited instances where children, after securing high-paying global careers or launching startups, no longer depend on parental wealth.
“One of our clients recently realised that after funding his daughter’s Ivy League MBA, she was earning more than his last drawn salary, and she does not need the parents’ support anymore. Instead, she wants her parents to be healthy and happy. This realisation freed up up to 40 per cent of the client’s portfolio, which was earmarked for her inheritance,” Paulchaudhuri said.
“We are seeing retirees strike a balance between preserving wealth for legacy and using it during their own lifetime,” said Sandipan Roy, chief investment officer at Motilal Oswal Private Wealth. “Longer retirements and financially independent next-generation families are key drivers of this shift.”
Another trend aiding this transition is the use of reverse mortgages, a financial tool for senior citizens to pledge their self-occupied home to a lender in exchange for regular, tax-free income without selling or vacating the property.
“It allows seniors to unlock the equity in their homes to fund their lifestyle while continuing to live there. It’s the ultimate tool for strategic decumulation—turning brick and mortar into life and experiences without the need to sell,” Paulchaudhuri said.
Bucket strategy
To operationalise this “spend-over-save” approach, wealth managers are increasingly deploying a structured “bucket strategy”, segmenting retirement funds into distinct pools for income, healthcare, lifestyle and legacy.
The income bucket focuses on generating regular cash flows. Tools such as systematic withdrawal plans (SWPs) from mutual funds are gaining traction, offering flexibility and tax efficiency compared with traditional interest income. Life annuities, which provide guaranteed lifelong income, are also seeing renewed interest.
“Interest income is taxed at the slab rate. For a CXO (chief experience officer) in a large organisation in the 30 per cent bracket, on a ₹10 lakh interest payout, the losses are nearly ₹3 lakh to taxes. We advocate for SWP. At the current 12.5 per cent LTCG (long-term capital gains) tax rate, the tax leakage is drastically reduced, compared to interest income,” Paulchaudhuri said.
“Longer life expectancy means retirees need income for 25–30 years, making sustainable cashflow planning essential. At the same time, limited pension coverage in India means individuals must create their own income streams. Volatile interest rates and lower fixed-deposit returns have also pushed retirees to look beyond traditional options, while tax efficiency is shaping withdrawal choices. In this context, SWPs are gaining popularity as a flexible and tax-efficient way to generate regular income,” said Roy
“While SWPs are often promoted as practical solutions, supplementing these with annuity products can add an extra layer of security. Annuities offer predictable, guaranteed returns that can last throughout the retiree’s lifetime, and, if chosen, extend to their spouse as well. Particularly for families with financially independent children, opting for an inflation-linked annuity without a legacy component can be an effective way to maximise income and maintain a comfortable lifestyle,” said Anurag Gupta, director and CBO, partnership channel, Axis Max Life Insurance.
Healthcare planning forms a critical second bucket. Advisers warn that many retirees underestimate medical inflation, which is hovering around 15 per cent annually.
“Many retirees believe a ₹15–20 lakh health insurance cover is sufficient, but they often overlook the compounding effect of medical inflation. We urge our clients to transition toward a ₹1 crore comprehensive policy. For a senior executive, this isn’t just an expense; it is the ultimate firewall that protects the rest of their lifestyle corpus from being eroded by a single medical event,” Paulchaudhuri said.
Once essential expenses are secured, the focus shifts to the lifestyle bucket—arguably the most visible sign of changing attitudes. Retirees are allocating funds for travel, luxury hobbies and experiential spending, often front-loading these in their 60s and early 70s when health permits.
“We are seeing affluent grandparents increasingly using their lifestyle buckets to fund lavish trips with their grandchildren. The idea here is to transfer wealth through shared living memories rather than a cold wire transfer after death. At the same time, collecting art and wine to golf club memberships, seniors are increasingly seeking high-end hobbies after leaving the corporate world,” a city-based pension advisor said.
However, the allocation formula for each bucket varies according to the individual. “There is no one-size-fits-all solution, and hence investors should involve advisors to create plans that suit their own needs, fit their disposition towards risk and meet their
expectations from the retired life,” Roy said.
4 per cent guardrail
Despite the growing appeal of this approach, advisers caution that a “spend more” philosophy must be carefully calibrated. “The biggest risk is longevity risk—the possibility of outliving one’s savings,” Roy said. “With retirement potentially spanning 25 to 30 years, excessive early spending can jeopardise long-term financial security.”
Inflation remains a key concern. Even moderate price increases can erode purchasing power over extended periods, particularly if portfolios lack sufficient exposure to growth assets. In that context, a section of pension fund managers refer to the 4 per cent rule as a guardrail to ensure that a strategic decumulation does not lead to running out of funds too early in retirement.
The rule, which was popularised in the mid 1990s by US-based financial advisor William Bengen, essentially states that an individual may withdraw up to 4 per cent of the total value of their portfolio in the first year of retirement. Bengen later updated his findings based on further research to suggest 4.7 per cent as the safe withdrawal rate in one’s first year of retirement
Naresh Pachisia, founder and managing director of SKP Securities, said retirement spending should be flexible, with the 4 per cent rule serving as a guide. He stressed that withdrawals must balance needs without eroding the corpus, making inflation-linked adaptation essential rather than relying on a static percentage.
Gupta said the 4 per cent rule oversimplifies retirement risks, urging diversification.