How much do you need to retire?
The planner first grows your current monthly expenses by inflation up to your retirement age. It then finds the lump sum that can pay those expenses, rising with inflation each year, until the age you plan for. It also counts the growth of your current savings, and the rest is the amount you must build by investing every month.
Corpus = yearly expense × (1 − (1 + g)−m) ÷ g × (1 + g) g is the real return after retirement, (1 + return) ÷ (1 + inflation) − 1, and m is the number of retired years. The monthly amount comes from the future value of a SIP.
Worked example
Ways to close a gap
- Start earlier. Ten extra years of investing can cut the monthly amount by more than half.
- Raise your SIP every year. Increasing the amount with your salary makes the target far easier.
- Retire a little later. The table above shows how much one or two extra working years help.
- Plan for a long life. Planning until 85 or 90 is safer than 75, because retirement can last 30 years.
Frequently asked questions
What inflation should I use?
India’s long-term inflation has averaged about 5% to 6%. Medical and education costs often rise faster. Using 6% is a reasonable default.
What return can I expect?
Equity-heavy portfolios have historically given around 10% to 12% a year over long periods, but with ups and downs. After retirement most people shift to safer assets, so a lower return of 7% to 8% is more realistic.
Why does the corpus look so large?
Because inflation makes today’s expenses much higher by the time you retire. ₹50,000 a month today becomes about ₹1.6 lakh a month after 20 years at 6% inflation.
Does this include EPF, NPS or PPF?
Add whatever you have saved so far into the retirement savings box. For future contributions, add them to your monthly investment plan, or use the NPS and PPF calculators.
Does this include tax on withdrawals?
No. Taxes depend on where you hold the money. Plan with a small buffer, or talk to a tax advisor.