How much corpus do I need to retire in India?

It depends entirely on your current expenses, inflation, life expectancy, and the return you can earn on your retirement portfolio. A common illustrative approach: estimate your monthly expenses at retirement (current expenses × inflation factor), then compute the present value of an inflation-growing annuity for the number of years you expect to live in retirement. This calculator does that computation automatically. There is no universal number — use the sliders to stress-test different scenarios.

What is the 4% rule and does it apply to India?

The 4% rule (from the US Trinity Study) suggests withdrawing 4% of your corpus in the first year of retirement and increasing withdrawals with inflation — historically this has not depleted a US portfolio over 30 years. In India, higher inflation, different asset returns, and shorter available history make the 4% rule a starting point rather than a conclusion. Many Indian financial planners use a 3-3.5% withdrawal rate for conservative planning, or use the growing annuity approach this calculator employs.

Should I assume 12% pre-retirement returns?

12% is a commonly used illustrative assumption for a predominantly equity mutual fund portfolio in India, roughly reflecting historical long-run equity returns in Indian backtests. It is an assumption, not a forecast. A more conservative planner might use 10%, a more aggressive one might use 14%. The key insight is that small differences in assumed return dramatically change the required SIP over long horizons — which is why this calculator lets you adjust the slider.

What return should I assume after retirement?

Post-retirement portfolios are typically more conservative — the sequence-of-returns risk (a bad market year early in retirement can permanently impair a portfolio) makes heavy equity exposure risky when you depend on the portfolio for income. Common practice is to shift towards a balanced or debt-tilted allocation, which historically returns 6-8% in India. This calculator defaults to 7% — adjust it based on your planned asset allocation.

Retirement Planner Calculator — Corpus & Monthly SIP for India

Why retirement planning matters more than it seems

Most people in India think about retirement in the abstract — something that will happen eventually and can be dealt with later. The unfortunate mathematical reality is that procrastination in retirement planning is exponentially more expensive than procrastination in most other financial decisions. This is because retirement planning depends on compounding, and compounding is time-dependent. A rupee saved at age 25 has 35 years to compound before a retirement age of 60; a rupee saved at age 45 has only 15 years. At a 12% return, ₹1 invested at 25 grows to ₹52 by retirement. The same ₹1 invested at 45 grows to only ₹5.47. The difference is not 2x or 3x — it is nearly 10x. This is why the most important variable in a retirement plan is not the return assumption or the portfolio allocation — it is when you start.

How inflation erodes purchasing power

Inflation is the silent destroyer of retirement plans that are not explicitly designed to account for it. If you spend ₹50,000 per month today and inflation runs at 6% per year, you will need ₹96,000 per month in 10 years to maintain the same standard of living, and ₹2.87 lakh per month in 30 years. A retirement corpus computed at today's spending levels, without inflating forward, will be severely understated.

Indian CPI inflation has averaged approximately 6-7% over the past two decades, with healthcare inflation consistently running higher — often 10-15% per year. Healthcare costs tend to rise as you age, making the inflation impact on retirement spending worse than a flat average would suggest. This calculator uses a single inflation rate for simplicity; a more granular plan would separate out healthcare and other fast- inflating categories.

The accumulation phase: building the corpus

The accumulation phase is the period from now until retirement. During this phase, the goal is to grow your portfolio through a combination of regular contributions (SIPs, EPF, PPF, NPS, direct equity) and investment returns. The mathematics of the accumulation phase is straightforward: the future value of a regular monthly SIP at a given return over a given time. What is not straightforward is the discipline required to maintain contributions through market downturns, resist the temptation to redeem early, and increase contributions as your income grows.

A common error in retirement planning is treating the EPF balance as the entirety of the retirement corpus. For many formal sector employees, EPF contributions are significant, but the corpus they generate is often not inflation-adjusted enough to fund a 25-30 year retirement comfortably. The EPF interest rate is set by the EPFO board annually and has historically been around 8-8.5% — useful, but lower than long- run equity returns. A well-rounded retirement plan typically supplements EPF with equity mutual funds through SIPs, NPS (for its tax benefits), and possibly direct equity.

The withdrawal phase: making the corpus last

The withdrawal phase — retirement itself — is where the plan either holds or fails. The central challenge is that you are now drawing down the corpus while it continues to (hopefully) earn returns. The key risk in this phase is called sequence-of-returns risk: if the market experiences a major downturn in the early years of your retirement, you are selling assets at low prices to fund living expenses, which permanently impairs the corpus and can cause it to run out far earlier than projected.

This is why post-retirement portfolios tend to be more conservative. A common approach in India is to gradually shift from equity to hybrid and then to debt/income-generating assets as you approach and enter retirement. A 70% equity / 30% debt portfolio at age 55 might become 50/50 at 60 and 30/70 at 70. This reduces the expected return but also reduces the variance — making the drawdown trajectory more predictable. This calculator uses a single flat post-retirement return; in practice you would model this more carefully.

The 4% rule and its adaptation for India

The "4% rule" originated from the US Trinity Study (1998), which found that a portfolio of 50-75% equity / 25-50% bonds had historically been able to sustain an initial withdrawal rate of 4% of the corpus per year (inflation-adjusted) for at least 30 years in all rolling historical windows in US market data. It became a widely cited rule of thumb for retirement planning.

For Indian investors, the 4% rule requires modification for several reasons. First, India's historical equity data covers fewer complete market cycles and shows higher volatility. Second, Indian inflation has generally been higher than US inflation, making the real return on debt lower relative to withdrawal needs. Third, Indian retirees in 2024 face 30-35 year retirements (retiring at 58-60, living to 85-90+), which is longer than the 30-year horizon the Trinity Study focused on. Many Indian financial planners use a more conservative 3-3.5% withdrawal rate. This calculator uses the growing annuity approach, which is more precise: it computes the corpus needed to fund a specific inflation-growing withdrawal stream over a specific number of years.

Starting early: the compounding argument in numbers

Consider two investors, Arjun and Priya. Arjun starts a ₹10,000/month SIP at age 25 and stops at age 45 — 20 years of contributions. Priya starts a ₹10,000/month SIP at age 45 and continues until retirement at 60 — 15 years. Assuming 12% annual returns, Arjun's corpus at 60 is approximately ₹3.6 crore. Priya's corpus at 60 is approximately ₹50 lakh. Arjun contributed ₹24 lakh over 20 years; Priya contributed ₹18 lakh over 15 years. Despite contributing more money and for longer, Priya ends up with a corpus 85% smaller — purely because of the timing difference. This is the power of compound growth over long horizons, and it is the single most important number in any retirement plan.

Other factors this calculator does not capture

EPF and NPS contributions. Many salaried employees have significant EPF balances. This calculator assumes you are building your corpus entirely through the SIP you enter. Deduct existing corpus and EPF/NPS projections to estimate the incremental SIP you need.
Irregular windfalls. Property sales, inheritances, bonuses, ESOPs — these can significantly change the corpus projection. The calculator does not model lumpsum injections.
Taxes. Capital gains tax on equity fund redemptions, income tax on withdrawals from certain instruments — these reduce the effective corpus. Model post-tax returns where applicable.
Healthcare inflation. Historically higher than general CPI. A dedicated health insurance plan and a separate healthcare buffer are important supplements to any retirement plan.

This page is educational only and does not constitute investment or financial planning advice. All projections use illustrative return and inflation assumptions that may not reflect actual future outcomes. Consult a SEBI-registered investment adviser or certified financial planner before making retirement planning decisions. Past market returns do not guarantee future results.

Year-by-year breakdown