How to Use the Retirement Calculator
Enter current age, retirement age, current savings, monthly savings, expected return, inflation, and monthly expenses today. The calculator shows corpus needed, corpus you will have, and any gap.
Retirement Calculator Formula
Monthly SIP needed = back-calculated from SIP FV formula to reach target corpusExample Calculation
Age 30, retire at 60, expenses ₹50,000/month today, 6% inflation, 10% return:
Inflation-adjusted corpus needed for 25-year retirement
Corpus needed ≈ ₹8.1 crore
How Big a Retirement Corpus Do You Actually Need?
Retirement planning sounds intimidating, but it reduces to one question: how large a pot of money do you need so that it, plus its returns, can fund your expenses for the rest of your life without running out? The popular starting point is the 4% rule — if you can live on 4% of your corpus each year, the corpus should last roughly 30 years. In reverse, that means you need about 25 times your annual expenses. Someone who needs ₹6 lakh a year would target a corpus of around ₹1.5 crore.
This is only a starting estimate. It assumes your investments keep growing in retirement and that your withdrawals rise with inflation. In the Indian context, where inflation has historically run higher than in the West, many planners suggest a more conservative withdrawal rate of 3–3.5%, which means targeting an even larger corpus.
Why Inflation Is the Real Enemy
The single biggest mistake in retirement planning is underestimating inflation. A lifestyle that costs ₹6 lakh a year today could cost ₹15–20 lakh a year in 25 years at 6% inflation. Your corpus must be sized against your future expenses, not today's. This is also why parking your entire retirement savings in fixed deposits is dangerous: if your FD earns 7% and inflation is 6%, your real growth is only 1%, and after tax it may be negative. To stay ahead of inflation over a multi-decade horizon, a portion of your retirement savings needs to be in growth assets like equity.
The Power of Starting Early
Because of compounding, when you start matters far more than how much you start with. Consider two people targeting retirement at 60:
- Start at 25: a relatively small monthly investment compounds for 35 years and can comfortably build a large corpus.
- Start at 40: you must invest three to four times as much each month to reach the same figure, because you have lost the most powerful compounding years.
- Start at 50: catching up becomes extremely hard, and you may have to work longer or accept a smaller corpus.
The lesson is simple and urgent: the best time to start was years ago; the second best time is now, with whatever amount you can.
Building and Drawing Down the Corpus
A common approach is to accumulate through equity-heavy SIPs while you are young, gradually shifting towards safer debt instruments as retirement approaches, so a market crash just before you retire cannot devastate the corpus. After retirement, the goal flips from growth to sustainable income — often via a Systematic Withdrawal Plan that pays you a monthly amount while the remaining corpus stays invested. Use this calculator to estimate the corpus your target retirement lifestyle requires, then work backwards to the monthly SIP needed to get there. Revisit the numbers every few years, because your expenses, income, and assumptions will all change.
Frequently Asked Questions
What is the 4% safe withdrawal rule?
The 4% rule suggests withdrawing 4% of your retirement corpus annually. This means corpus needed = annual_expenses / 0.04. At 4%, a ₹1 crore corpus sustains ₹4 lakh/year.
Sources
All calculations run in your browser and are provided for information only — they are not investment, tax or legal advice. Verify current rates and rules with the official source above before acting.