Start with your expenses, not a magic number
There is no single number that works for everyone. The corpus you need depends on how much you will spend each month in retirement, how long you will live, and what your savings earn. So the first step is to estimate your monthly spending in today's terms.
Include regular costs like food, housing, utilities and healthcare. Leave out expenses that stop with work, such as commuting, and add costs that grow with age, such as medical care.
Step 1: Adjust the expenses for inflation
Prices rise every year, so ₹50,000 a month today will not buy the same things in 30 years. At 6% yearly inflation, expenses grow by a factor of about 5.7 over 30 years. So ₹50,000 a month today becomes roughly ₹2.87 lakh a month, or about ₹34.5 lakh a year, at the time you retire.
You can see how fast prices compound with the Inflation Calculator.
Step 2: Work out the corpus that funds those expenses
Next, find the lump sum that can pay out those rising expenses for the whole retirement. In our example you retire at 60 and plan to age 85, so the money must last 25 years. The corpus keeps earning while you withdraw, and your withdrawals rise with inflation each year.
With 8% returns after retirement and 6% inflation, the corpus needed is about ₹6.95 crore. That large figure often surprises people. It is a result of 30 years of inflation, not of lavish spending.
Step 3: Turn the corpus into a monthly SIP
Now work backwards. Assume you already have ₹5 lakh saved for retirement. At 12% a year it grows to about ₹1.8 crore over 30 years. That leaves roughly ₹5.15 crore to build, which takes a monthly SIP of about ₹14,600.
These are the example values in the Retirement Corpus Calculator, so you can try your own age, expenses and return assumptions there.
What to do if the number looks too high
Start earlier. Each extra year of investing reduces the monthly amount you need.
Raise your SIP every year as your income grows. The Step-up SIP Calculator shows how much this helps.
Revisit your assumptions. A lower expense target, a later retirement age or a more modest plan-to age all reduce the corpus.
Check your plan once a year and adjust. A rough plan that you follow is more useful than a perfect plan that you do not.
Frequently asked questions
What return should I assume after retirement?
Most people choose a lower rate than before retirement, because they shift part of the money to safer assets. The Retirement Corpus Calculator lets you set the two rates separately.
Should I include my EPF, PPF or NPS?
Yes. Add what you already have in these to the 'already saved' field, but only the part you are willing to count towards retirement.
Is this a financial plan?
No. It is an estimate based on assumptions you control. For a full plan, talk to a registered financial adviser.