Don't Panic-Sell Equity Near Retirement, Planners Say
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- Suresh Sadagopan of Ladder7 Wealth Planners warns that decisions made during turbulent times tend to fail, as prices can reverse within a single day—making market timing futile.
- Saurabh Jain of Stable Money recommends phasing down equity exposure over 12-24 months while retaining a modest allocation to diversified equity mutual funds to preserve long-term growth and protect purchasing power against inflation.
- Poonam Rungta of P Rungta Investments cautions against stopping SIPs during volatility, noting that panic exits from equity typically force reinvestment at higher prices later.
- The article advises drawing immediate income from debt portions, pension products, the Senior Citizen Savings Scheme, and government small savings rather than from the equity corpus, which should ideally remain near 30% in the pre-retirement phase.
- Sadagopan recommends tapering equity gradually from roughly 60% to 55-50%—not abruptly to 20%—and warns that over-accumulating cash risks pushing retirees into higher tax brackets or leaving money idle.
- Jain highlights that bank fixed deposits at small finance banks currently offer 8% or higher interest rates, with deposits up to ₹5 lakh per depositor insured under the DICGC framework, while high-rated corporate bonds add further stable income.
Why it matters: With retirement portfolios needing to last 25-30 years amid rising life expectancy and inflation, the sequence of final-year moves matters more than ever—selling equity into a downturn can permanently shrink the corpus, while fixed income alone loses ground to inflation. SIP continuity and gradual rebalancing emerge as the only path to preserve both stability and purchasing power.
