Retirement planning in India: How to calculate the corpus you’ll need

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If you’ve ever wondered, “How much money do I really need when I stop working?”, you’re not alone. Retirement planning feels overwhelming because the future is full of “what ifs.” But calculating a corpus is actually about breaking it into simple steps — expenses, inflation, and how long you expect to need the money.

Start with your monthly expenses

The easiest way to begin is by jotting down what you spend today — groceries, utilities, transport, lifestyle costs. Let’s say it’s Rs 50,000 a month. Remember, your expenses might shrink once kids are independent, but medical bills and leisure spending could grow. So take a realistic average.

Add inflation into the mix

This is where people often slip. That Rs 50,000 won’t stay Rs 50,000 twenty years from now. With inflation at 6%, it doubles roughly every 12 years. So if you’re retiring 20 years later, your monthly expenses may be closer to Rs 1.6 lakh. That’s the number you’ll actually need to sustain your lifestyle.

Think about how long you’ll need it

Life expectancy in India is rising. It’s safe to plan for 20-25 years of retirement, sometimes more. So if you’re spending Rs 1.6 lakh a month, that’s nearly Rs 19-20 lakh a year. Multiply by 25 years, and you’re looking at around ₹5 crore in future value. Sounds scary, but don’t panic yet.

Factor in returns on your savings

You’re not just hoarding money under a mattress. Your retirement savings will continue to earn returns — say, 6-8 percent from a mix of debt and equity investments. This growth reduces how much you actually need to save. Online retirement calculators can quickly crunch these numbers once you plug in inflation, expected returns, and years to retirement.

Work backward from the goal

Once you have the corpus number — say Rs 5 crore — you can calculate how much you need to save today. Break it into monthly SIPs or annual contributions to EPF, NPS, PPF, or mutual funds. Starting early makes a world of difference: a 30-year-old investing Rs 25,000 a month may reach the same goal that a 40-year-old would struggle to hit even with Rs 50,000 monthly savings.

The takeaway

Your retirement corpus isn’t about chasing a perfect number, it’s about building enough to cover your life with dignity and independence. Start small, stay consistent, and review every few years to adjust for changes. The earlier you begin, the less you’ll stress about whether you’ll have enough when the pay-cheques stop.