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Next toolsAssumptions and methodology
Transparent calculation notes for Retirement Calculator.
Formula used
Expenses are inflated until retirement (E_R), and the corpus is the present value of monthly withdrawals that start at E_R and rise with inflation until life expectancy.
Methodology
- Inflate today's monthly expenses to retirement age.
- Discount rising monthly withdrawals at the post-retirement return to get the corpus needed.
- Compare required corpus with current savings and contributions.
- Simulate the same cash flows year by year to show when the money runs out.
Core assumptions
- Inflation and return assumptions stay constant.
- Returns are treated as annual CAGR. The SIP calculator uses the r/12 convention, so the same SIP shows a slightly larger corpus there.
- Spending pattern remains similar in retirement.
- Life expectancy and retirement age are entered realistically.
Not included
- Healthcare shocks, taxes, pensions, one-time expenses, and sequence risk are simplified.
- Long-term inflation and return assumptions can drift materially.
About Retirement Calculator
Guide1Why Retirement Planning Matters
Retirement planning is the process of determining your financial goals for retirement and creating a strategy to achieve them. With increasing life expectancy in India (now averaging 70+ years) and rising healthcare costs, planning for a retirement that could last 25 to 30 years is essential.
The earlier you start planning, the more time your investments have to compound. A person who starts investing ₹10,000 per month at age 25 can accumulate significantly more than someone investing ₹30,000 per month starting at age 40, thanks to the power of compounding.
2Retirement Corpus Estimation
Your required retirement corpus depends on several factors:
Required corpus ≈ first-year retirement spending × (1 + r) × [1 − ((1 + g) ÷ (1 + r))ⁿ] ÷ (r − g)
Here g is inflation, r is the post-retirement return and n is the years in retirement, with withdrawals at the start of each year. If r equals g, the corpus is simply first-year spending × n. The calculator uses the monthly version of the same formula.
- Step 1: Estimate your current annual expenses
- Step 2: Inflate them to your retirement age using expected inflation
- Step 3: For a 25-year retirement, plan for roughly 18 to 25 times your first year's retirement spending: about 18× if returns beat inflation by 3 points (9% vs 6%), about 20× at 8% vs 6%, and 25× if returns only match inflation.
3How to Use This Retirement Calculator
- Step 1: Enter your current age, retirement age, and life expectancy
- Step 2: Input your current monthly expenses and expected inflation rate
- Step 3: Add your current savings and expected investment returns (pre and post retirement)
- Step 4: View the required corpus, monthly savings needed, and projected growth chart
4Retirement Investment Strategy
- 20s-30s: Aggressive allocation — 70-80% equity for long-term growth
- 40s: Balanced allocation — 50-60% equity, rest in debt and fixed income
- 50s: Conservative shift — 30-40% equity, increase debt allocation
- Post-retirement: Capital preservation — 20-30% equity, with regular-income options such as the Senior Citizens' Savings Scheme (up to ₹30 lakh), RBI Floating Rate Savings Bonds, the Post Office Monthly Income Scheme, annuities and short-duration debt funds