Plan your retirement corpus " calculate how much you need to save every month
A retirement calculator helps you determine the corpus (total savings) you need to maintain your current lifestyle after you stop working. Planning for retirement in India is crucial due to the lack of universal social security and rising inflation (both general and medical).
The calculator considers your current age, retirement age, life expectancy, current monthly expenses, expected inflation rate, and expected return on investment (ROI) post-retirement to estimate the required nest egg and how much you need to save monthly to reach that goal.
The 4% Rule (Thumb Rule): Historically, many planners suggest you need a corpus equal to 25 times your annual retirement expenses. This allows you to withdraw 4% in the first year and adjust for inflation thereafter.
Current monthly expense: 50,000 (6L/year)
Years to retire: 30
Expected Inflation: 6% p.a.
Expense at age 60: 6L A (1.06)^30 ?? 34.45 Lakhs per year!
Required Corpus (using 25x rule): 34.45L A 25 ?? 8.6 Crores
Inflation quietly erodes purchasing power. At 6% inflation, prices double every 12 years. If you need 50,000 a month today, you will need 1,60,000 for the exact same lifestyle 20 years from now. Failing to account for inflation means running out of money prematurely.
Post-retirement, your goal shifts from wealth creation to capital preservation and regular income. Planners usually recommend a "bucket strategy": 1-3 years of expenses in liquid funds/FDs, 4-7 years in safe debt instruments (SCSS, PMVVY), and the rest in conservative equity or balanced funds to beat inflation over the next 20+ years of retirement.
It depends purely on when you start. To reach a 5 Crore corpus: A 25-year-old needs a SIP of 8,000/month (at 12% returns). A 35-year-old needs 26,500/month. A 45-year-old needs 1,00,000/month. The earlier you start, the less you need to save due to the power of compounding.
A retirement calculator estimates how much money you need to save to maintain your desired lifestyle after retirement. It factors in your current savings, monthly contributions, expected returns, inflation, and retirement age to project whether your corpus will last through your retirement years.
Future Value = PV × (1 + r)n + PMT × [(1 + r)n − 1] / r
Where PV = current savings, PMT = monthly contribution, r = monthly return rate, n = months until retirement.
Required Corpus = Annual Expenses × 25 (the 4% rule)
Age 30, retire at 60, monthly expenses ₹50,000, inflation 6%, return 10%, current savings ₹5 lakh, monthly SIP ₹15,000.
Required corpus at 60: ~₹3.4 Cr | Projected corpus: ~₹3.8 Cr — You are on track!
The 4% rule says you can withdraw 4% of your retirement corpus annually without running out for ~30 years. So you need 25 times your annual expenses as your retirement corpus.
Financial advisors recommend saving 15-20% of your gross income for retirement. Starting early makes a massive difference due to compounding.
Yes, significantly. At 6% inflation, today's ₹50,000/month expenses become ~₹2.87 lakh/month in 30 years. Always plan with inflation-adjusted numbers.