Retirement Corpus Calculator

How Much Do You Actually Need to Retire?

The question sounds simple. The answer depends on four variables: your monthly expenses at retirement, the inflation rate over your retirement years, how long you live (longevity risk), and the return your corpus generates in retirement.

Most online retirement calculators use the 4% withdrawal rule — a guideline from a 1994 US study (the Trinity Study) that says you can withdraw 4% of your retirement corpus every year without running out of money over 30 years. In India, applying this rule blindly is a mistake. Indian inflation runs higher, expected equity returns are different, and our retirement products are structured differently.

For India, a 3–3.5% withdrawal rate is safer if you're planning for 30+ years. This means needing a larger corpus, but it also means you're less likely to outlive your money — which, given increasing life expectancy, is the actual catastrophic risk.

The Corpus Calculation — Working Backwards

Start with your current monthly expenses and project them to your retirement date using an assumed inflation rate. Then calculate the corpus needed to sustain those inflated expenses for your retirement duration.

Example: Current monthly expense = ₹80,000. Retirement in 25 years. Inflation = 6%. Withdrawal rate = 3%.

• Retirement monthly expense = ₹80,000 × (1.06)²⁵ ≈ ₹3,43,000/month = ₹41,16,000/year
• Corpus needed = ₹41,16,000 / 0.03 = ₹13.72 crore

That ₹13.72 crore is the corpus you need parked in investments on the day you retire — not the amount you invest during your career. The SIP required to build that corpus depends on your investment return assumption and years remaining.

The Pension Gap Problem in India

India has a structural pension gap. Unlike employees in the US or UK who often have defined benefit pension plans, most Indian private sector workers have no guaranteed retirement income beyond EPF. The EPFO manages over ₹21 lakh crore in assets, but the pension component — EPS — pays a maximum of ₹7,500/month regardless of your salary or years of service. That's not a retirement income; that's a rounding error.

NPS provides a market-linked corpus but forces 40% into an annuity at 5.5–6.5% per annum. On a ₹1 crore NPS corpus, 40% (₹40 lakh) goes into annuity paying roughly ₹20,000–22,000/month. For someone with ₹1 lakh monthly expenses at retirement, this covers 20% of needs. The rest must come from personal savings.

This is why retirement planning in India is entirely self-directed. There is no safety net. The government's social security schemes (like PMVVY) are capped and limited. Plan as if you are entirely on your own — because financially, most Indians effectively are.

SIP Required to Build Your Retirement Corpus

Once you know your target corpus, you can work backwards to find the monthly SIP required, assuming a reasonable equity return. The table below shows monthly SIP needed at 12% annual return to reach various corpus targets across different time horizons.

Practical Retirement Planning Decisions

Build your retirement corpus across multiple buckets rather than a single account. Equity mutual funds (for growth), NPS (for the tax deduction and forced discipline), PPF (for EEE status and stability), and eventually some allocation to debt or balanced advantage funds as you approach retirement.

Review your corpus target every 3 years — lifestyle inflation is real. If your expenses grow faster than your assumed inflation rate, your corpus calculation becomes obsolete. The biggest risk in retirement planning is not market volatility. It's underestimating how much you'll actually spend.