Retirement calculator: a quick guide
How much do you need to retire?
Enough to pay your living costs every year from retirement until late in life, while those costs keep rising with inflation. This calculator works out that corpus and the monthly SIP that could build it, after counting what you have already saved.
How this calculator works it out
Your monthly expenses are grown at the inflation rate to your retirement age. The corpus is the amount that, earning your assumed post-retirement return, can pay those expenses every year until your planning age as they keep rising (a growing annuity paid at the start of each year). Your current savings are grown to retirement and the SIP covers the gap.
Corpus = first-year expenses × [1 − ((1 + g) ÷ (1 + r))N] ÷ (r − g) × (1 + r)
g = inflation, r = return after retirement, N = years in retirement
An example
At 32, with ₹50,000 of monthly expenses, 6% inflation, retirement at 60 and a plan until 85, expenses reach about ₹2,55,584 a month at 60. The corpus needed is about ₹6.87 crore at an assumed 7% after retirement. ₹10 lakh already saved could grow to ₹1.86 crore at 11%, and a SIP of about ₹16,135 a month, rising 5% a year, covers the rest.
Good to know
- The common “25 times annual expenses” rule comes from US data. With higher inflation in India it can understate what you need, especially for a long retirement.
- Your EPF, PPF and NPS balances count towards the corpus. Add them to current savings.
- Health costs often rise faster than general inflation. The full life plan lets you plan for them separately.
- Planning to stop work early? See the FIRE calculator.