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 × (1.06)^30 ≈ ₹34.45 Lakhs per year!
Required Corpus (using 25x rule): ₹34.45L × 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.