Worked example
Example with the default numbers — change them above.
Your age today: 30 · Retirement age: 60 · Money should last until age: 85 · Monthly expenses today: ₹50,000 · Inflation until retirement: 6% · Return on the corpus after retirement: 8% · Already saved for retirement: ₹5,00,000 · Return until retirement: 11%
To spend ₹50,000 a month in today's money from 60 to 85, you need ₹6.71 Cr at retirement (₹1.17 Cr in today's money); a SIP of ₹22,004 a month gets you there.
| Corpus needed at 60 | ₹6.71 Cr · ₹1.17 Cr in today's money |
|---|---|
| Monthly SIP needed | ₹22,004 · For 30 yrs at 11% |
| Monthly expenses at 60 | ₹2,87,175 · Today's ₹50,000 after 30 yrs of 6% inflation |
| Your savings by 60 | ₹1.14 Cr · 17% of the corpus; gap ₹5.56 Cr |
| Years in retirement | 25 yrs · From 60 to 85 |
How the Retirement Corpus Calculator works
- Your monthly expenses are inflated from today to the month you retire.
- During retirement, each month's expense is taken at the start of the month and rises with inflation every year.
- The corpus needed is the amount that pays all those expenses while earning your post-retirement return and reaches zero at your chosen age.
- Your existing savings are grown to retirement at the pre-retirement return.
- The monthly SIP needed is the amount, invested at the start of every month, that tops your savings up to the corpus by retirement.
Corpus as the present value of rising expenses
E = monthly expenses today × (1 + i)^n
Corpus = Σ over months t of E × (1 + j)^(year of t) ÷ (1 + m)^t
i = inflation until retirement; j = inflation after retirement
m = monthly equivalent of the post-retirement return; n = years to retirementAssumptions and limits
- Returns are the same every year; real returns vary, and a fall early in retirement is the biggest risk.
- Expenses rise smoothly with inflation; healthcare costs in India have often risen faster.
- The corpus is designed to reach exactly zero at your chosen age, with no buffer; plan to a generous age.
- Pension, annuity or rental income is not included; reduce your expenses by that income if you have it.
- Tax on withdrawals and returns is not modelled; enter returns after costs.
Frequently asked questions
How much retirement corpus do I need in India?
It depends on your expenses, years to retirement and how long the money must last. With this page's defaults, ₹50,000 a month today, retiring at 60 in 30 years and planning to 85, you need about ₹6.7 crore at 60, about ₹1.2 crore in today's money. That assumes 6% inflation throughout and an 8% return after retirement.
Why does the retirement corpus look so large?
Because of inflation. At 6% a year, prices roughly double every 12 years and rise about 5.7 times in 30 years, so ₹50,000 a month today becomes about ₹2.9 lakh a month at retirement. The corpus also has to fund 25 or more years of rising expenses. The figure in today's money, shown alongside, is the easier one to judge.
What return should I assume after retirement?
Something you can rely on, after costs. Retirement money is usually held more conservatively than savings for growth, with a mix of debt funds, deposits, government schemes and some equity. Many planners assume a return a little above inflation. Assuming too high a return makes the corpus look smaller than you really need, so err on the low side.
Until what age should I plan my retirement corpus?
Plan for longer than average. Someone who has already reached 60 can expect to live to an older age than the average at birth, which includes people who die young, and many live into their late 80s or 90s. Since running out of money is far worse than leaving some behind, many planners use 85 to 90, or later if your family tends to live long.
How is this different from a FIRE number?
A FIRE number divides yearly spending by a withdrawal rate, such as 3.5%, meant to last 30 to 50 years or longer; whether it does depends on markets, so test it in the Monte Carlo simulator. This calculator sizes the corpus to run out at a specific age, so it is usually smaller for a normal retirement at 60. For early retirement at 40 or 45, the FIRE calculator's approach is more cautious.
Should EPF, PPF and NPS count towards my retirement corpus?
Yes, add their current balances in 'Already saved'. They grow at the return you enter, so lower it if much of your money is in EPF or PPF. Ongoing contributions belong in the monthly SIP figure. At normal exit, NPS requires at least 20% of the corpus (40% for government employees) to buy an annuity, which pays a pension rather than a lump sum, so count that income separately.
Sources
- Ministry of Statistics and Programme Implementation: consumer price index (inflation) data
- Reserve Bank of India: inflation, interest-rate and household-finance statistics
- AMFI: mutual fund data and investor education (SIP and SWP basics)
- SEBI: investor education on market risk
Logic and rates last verified on .
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