How Much Equity Should You Hold After Retirement?

Quick answer: Most Indian retirees hold 30% to 50% of their money in equity (shares and equity mutual funds). A popular simple rule is 100 minus your age. Your share depends on your expenses, other income, and comfort with market falls. Keep 5 to 7 years of expenses in safer assets.

Key Facts

Inflation (the rise in prices every year) matters after retirement. At 6% a year, a monthly cost of ₹40,000 grows to about ₹1.28 lakh in 20 years. This 6% is only an example.
As per Income Tax Department rules for FY 2026-27, long-term equity fund gains pay 12.5% tax above ₹1.25 lakh a year. Long-term means held over 12 months. Shorter holds pay 20%.
The Senior Citizens’ Savings Scheme (SCSS) is for people aged 60 and above. Its rate is 8.2% for October to December 2026, per a Finance Ministry notice dated 30 September 2026. The limit is ₹30 lakh.
The 100 minus age rule is a planner’s guide. SEBI and AMFI do not set it.
Equity mutual funds carry market risk. No adviser can promise returns.

Last updated: October 2026

Retirement changes how you think about money. You no longer add savings every month. Instead, you take money out. So a big market fall feels scarier than it did at 40. But keeping everything in a bank deposit has a risk too. Prices rise every year, and your savings must last 25 to 30 years. This guide helps you pick an equity share that fits your life. You will see a simple table, a bucket plan, a worked rupee example, and the tax rules.

What Equity Share Suits Different Retirees?

Asset allocation means how you split your money between equity and safer debt. Debt means bank deposits, bonds, and debt mutual funds. Many planners use a simple rule: 100 minus your age. At 60, that gives 40% in equity. At 70, it gives 30%. Use it only as a starting point. The table shows three common profiles.

Profile	Typical equity share	Who it may suit
Cautious	20% to 30%	You depend fully on savings and worry about market falls.
Balanced	30% to 40%	You follow 100 minus age and have some other income.
Growth-leaning	40% to 50%	A pension or rent covers most costs, and you want to leave money for your family.

These ranges are illustrative and for education only. They are not rules from SEBI or AMFI.

About the author: Deepak Gokul holds the CWM® (Chartered Wealth Manager) certification. He is NISM-Series-XVII: Retirement Adviser Certified and an IRDAI Licensed Insurance Advisor. He has over 19 years of experience in financial planning. His firm, Deepak Wealth Framework Pvt Ltd, is an AMFI Registered Mutual Fund Distributor based in Chennai.

Why Should You Keep Any Equity After Retirement?

Your monthly bill of ₹40,000 today will not stay at ₹40,000. If prices rise 6% a year, that bill becomes about ₹1.28 lakh in 20 years. The 6% is only an example. Please verify current inflation data from the RBI.

A bank deposit may not always keep up with rising prices. Equity has a better chance of growing faster than prices over many years. But equity can fall sharply in the short term. So the goal is not all equity or zero equity. The goal is the right mix for you.

What Happens If the Market Falls Early in Retirement?

A fall in your first few years of retirement hurts the most. Experts call this sequence risk. It means the order of returns matters when you take money out. Here is a simple example.

A retiree aged 60 has ₹1 crore in savings.
She keeps 40% in equity (₹40 lakh) and 60% in safer assets (₹60 lakh).
She spends ₹4 lakh a year.
Equity falls 30%. Her equity drops to ₹28 lakh, and her total becomes ₹88 lakh.
Her safer ₹60 lakh can still pay ₹4 lakh a year for 15 years.

So she does not need to sell equity at low prices. Her equity gets time to recover, though no one can promise it will. This example ignores interest, tax, and rising costs, to keep the numbers simple.

How Does the Bucket Method Work?

The bucket method splits your money by when you will need it. Each bucket has one job.

Bucket 1 (years 1 to 2): savings account, liquid funds, and short deposits. This pays your monthly bills.
Bucket 2 (years 3 to 7): SCSS, fixed deposits, and debt funds. This refills Bucket 1.
Bucket 3 (year 8 onward): equity mutual funds. This helps your money keep up with rising prices.

A Systematic Withdrawal Plan (SWP) lets you take a fixed sum from a mutual fund every month. You can use it to refill Bucket 1.

SCSS is a government savings scheme for people aged 60 and above. Its rate is 8.2% for October to December 2026, per a Finance Ministry notice dated 30 September 2026. The deposit limit is ₹30 lakh. The interest is fully taxable. Please verify the latest rate on the India Post website.

How Is Equity Taxed After Retirement?

Tax rules can change, so check them every year. For FY 2026-27, equity mutual fund gains follow these rules.

Sell after 12 months, and the gain is long-term. You pay 12.5% on long-term gains above ₹1.25 lakh in a year.
Sell within 12 months, and the gain is short-term. You pay 20%.

For example, suppose you book a long-term gain of ₹3 lakh in one year. The first ₹1.25 lakh is tax-free. The other ₹1.75 lakh pays 12.5%. Your tax is ₹21,875.

Debt fund gains work differently. For units bought after 1 April 2023, gains are taxed at your slab rate. That is the tax rate for your income level. Please verify the latest rules on the Income Tax Department website.

When Should You Review Your Equity Share?

Review it once a year. Rebalancing means moving money back to your target mix. For example, if equity grows from 40% to 50%, move some money into safer assets. Also review after big life events, like a health emergency or a new income source.

Keep your medical cover and emergency fund separate from your retirement money. That way, one bad year does not force you to sell equity.

Frequently Asked Questions

How much equity should a 60-year-old hold after retirement?

Many planners start with the 100 minus age rule. At 60, that means about 40% in equity. Some retirees hold 30% to 50%, based on their pension, expenses, and comfort with risk. This is a simple guide. SEBI and AMFI do not set it. A planner can fit the number to your own situation.

Should retirees stop investing in equity completely?

Not always. Prices rise every year, and your money may need to last 25 to 30 years. A small equity share can help your savings keep up with rising prices. But equity can fall sharply in the short term. So match the share to your comfort and your need for regular income.

What is the bucket method for retirement?

The bucket method splits your money by when you need it. Bucket 1 covers the next 1 to 2 years of expenses. Bucket 2 covers years 3 to 7 through safer options like SCSS, deposits, and debt funds. Bucket 3 holds equity for the long term. This way, you avoid selling equity after a market fall.

How does an SWP work in retirement?

A Systematic Withdrawal Plan (SWP) lets you take a fixed amount from your mutual fund every month. Each withdrawal has two parts: your original money and your gain. Tax applies only to the gain part. Please check the latest tax rules before you start an SWP.

How often should I rebalance my retirement portfolio?

Most planners review once a year. Rebalancing means moving money back to your target mix. For example, if equity grows from 40% to 50% of your savings, you move some into safer assets. Also review after big life events, like a medical emergency or a change in income.

Is SCSS a suitable place for the safer part of my savings?

SCSS is open to people aged 60 and above, with a deposit limit of ₹30 lakh. As reported, it pays 8.2% a year for October to December 2026. The interest is fully taxable. The term is 5 years, extendable by 3 years. Please verify the latest rate on the India Post website before you invest.

Where Can You Check the Official Sources?

SEBI for mutual fund rules and investor education
AMFI for mutual fund data and distributor rules
Income Tax Department for current tax rules
India Post for SCSS rates and rules