Key points
- Start from today’s monthly expenses, not your salary.
- At 6% inflation, ₹60,000 a month today becomes about ₹3.07 lakh a month in 28 years.
- A retirement of 25 years at that level needs a corpus of roughly ₹8 crore.
- Starting 10 years earlier can cut the required monthly investment by more than half.
Step 1: your expenses at retirement
Add up what your household spends each month today, excluding EMIs that will be over and savings. Then inflate it: at 6% a year, costs double roughly every 12 years. ₹60,000 a month at age 32 becomes about ₹3,07,000 a month at 60.
Step 2: the corpus that funds it
The corpus must pay rising expenses for the rest of your life — plan for at least 25–30 years after retirement. What it needs depends on how much it earns after you retire, relative to inflation. With a 7% post-retirement return and 6% inflation, funding 25 years of ₹3.07 lakh a month (rising with inflation) needs roughly ₹8.2 crore.
A rough shortcut: the corpus should be about 25–30 times your first-year retirement expenses, more if you retire early or expect to live long. The retirement calculator does the exact version.
Step 3: the monthly investment
Subtract what your existing savings, EPF and PPF are projected to grow to, and find the monthly SIP that covers the gap. Starting early makes an enormous difference: ₹5,000 a month from age 25 to 60 at 12% grows to about ₹3.2 crore, while the same SIP from 35 reaches only about ₹95 lakh — a third as much, for 30% less invested.
Things people forget
- Health costs rise faster than general inflation; keep a separate health fund and adequate health insurance into old age.
- Returns after retirement should be conservative — most of the corpus needs to be in stable, lower-risk investments.
- Big one-off costs — children’s weddings, home repairs, helping family — should be planned separately.
- Taxes on withdrawals and annuity income reduce what you can spend.
- Review the plan every year or two and after major life events.
Investing the corpus after you retire
A common approach is to divide the corpus into buckets by when the money will be needed:
- Near-term bucket: 2–3 years of expenses in savings, FDs, Senior Citizens’ Savings Scheme or liquid funds, for regular withdrawals.
- Medium-term bucket: 5–7 years of expenses in debt and conservative hybrid funds, refilling the near-term bucket.
- Long-term bucket: the rest in a diversified equity allocation, to keep growing ahead of inflation for the later years of retirement.
Each year, move money down the buckets. A systematic withdrawal plan (SWP) from a fund can provide a monthly income from the medium bucket; the SWP calculator shows how long a corpus lasts at a given withdrawal rate.
Frequently asked questions
Is ₹1 crore enough to retire in India?
It depends on your expenses and how far away retirement is. ₹1 crore supports roughly ₹30,000–₹35,000 a month of today’s expenses if you retired now; for someone retiring in 20–25 years, inflation means far more is needed. Use the retirement calculator with your own numbers.
Should I count EPF and PPF in my retirement corpus?
Yes. Project their values at retirement and subtract them from the corpus you need; the rest is the gap your other investments must fill.
What inflation rate should I assume?
Many planners use 6% for general expenses and 8%–10% for healthcare. Using a slightly higher rate than you expect builds in a margin of safety.