How to use the retirement calculator
- Your age, retirement age, and the age to plan till. Plan for longer than feels necessary. Running out at 82 is far worse than leaving money behind.
- Monthly expenses today. What your household spends now. Leave out EMIs that will be over before you retire.
- Retirement savings so far. EPF, PPF, NPS and mutual funds meant for retirement.
- Inflation, return before retirement (often 10 to 12% with mostly equity) and return after retirement (often 7 to 8% with a more conservative mix).
- Yearly SIP step-up, if you will raise the SIP as your salary grows.
The chart shows your money across your whole life: rising while you invest, then gently falling as you draw it down.
How the corpus is calculated
- Your monthly expense is inflated to your retirement age.
- The corpus is the amount that, earning your post-retirement return, can pay that expense every year, increasing with inflation each year, until the age you plan for. In formula terms it is the present value of a growing annuity.
- Your current savings are grown to retirement, and the remaining gap is turned into a monthly SIP.
Worked example
Age 30, expenses ₹50,000 a month, ₹5 lakh saved, 6% inflation, 12% before and 8% after retirement, planning till 85.
| Retire at | Expenses at retirement | Corpus needed | Monthly SIP (flat) | With 10% step-up |
|---|---|---|---|---|
| 60 | ₹2.87 lakh/month | ₹6.95 crore | ₹15,436 | ₹6,168 to start |
| 55 | ₹2.15 lakh/month | ₹5.97 crore | ₹26,974 | ₹11,972 to start |
Two lessons. First, ₹50,000 today really does become ₹2.87 lakh a month in 30 years at 6% inflation; that is why the corpus looks so large. Second, retiring five years earlier cuts the time to save and lengthens the time to spend, so the SIP almost doubles. If retiring well before 60 is the goal, the FIRE calculator is built for that.
Starting at 40 instead of 30, with the same expenses and savings, needs about ₹34,000 a month.
What the calculator leaves out
- Pension or rental income. If you will have some, reduce the monthly expense by that amount.
- Big one-off costs like a child's wedding or medical emergencies. Plan those as separate goals.
- Health insurance. Buy it well before retirement; premiums and exclusions get harder with age.
- Tax on withdrawals.
Questions people ask
How much money do I need to retire in India?
It depends on your expenses, how far away retirement is and how long it must last. As a rough guide, the corpus usually works out to 20 to 30 times your yearly expenses in the first year of retirement, depending on how long it must last and the return you assume. In the example above it is about 20 times. Use the calculator for a figure based on your numbers.
Is ₹1 crore enough to retire?
For most people retiring 20 or more years from now, probably not. Over a 25-year retirement at 8% returns and 6% inflation, ₹1 crore supports expenses of about ₹41,000 a month in the first year. If retirement is 20 to 25 years away, that is only about ₹10,000 to ₹13,000 a month in today's money.
What return should I assume after retirement?
Lower than before retirement, because you will hold more debt to keep income steady. 7 to 8% is a common planning figure for a balanced retirement portfolio.
Do EPF and PPF count towards my retirement corpus?
Yes. Add their current balances to "retirement savings so far". You can also reduce the required SIP by the amount you contribute to them each month.
How do I take a monthly income after I retire?
A systematic withdrawal plan (SWP) from mutual funds is one common way. The SWP calculator shows how long a corpus lasts at a given withdrawal.