Retirement Calculator

What a retirement calculator actually answers

Retirement planning comes down to two numbers: the corpus — the lump sum you need on the day you stop working — and the monthly investment that builds it in time. This calculator sizes both. It starts from what you spend today, inflates that spending to your retirement year, works out how large a pot must be to pay you a rising income for the rest of your life, and then tells you the monthly SIP needed to reach that pot. Because the corpus sits decades away, the single biggest driver of the answer is inflation — and it is exactly the variable most people underestimate.

Why today's expenses are the wrong target

A household spending ₹50,000 a month today will not spend ₹50,000 a month in retirement. At 6% inflation, prices roughly double every 12 years. So a 30-year-old planning to retire at 60 faces a monthly expense of about ₹2.87 lakh in the first year of retirement — the same lifestyle, 5.7× the rupee cost. Planning around today's figure is the classic mistake that leaves retirees short within a decade. See how corrosive rising prices are over long horizons with our Inflation Calculator.

The real-return method this calculator uses

Once retired, your corpus keeps earning — but you also keep withdrawing, and each year's withdrawal must grow with inflation. The calculator treats this as a growing annuity: withdrawals rise at inflation rate g while the untouched balance compounds at your post-retirement return r. The corpus needed on retirement day is:

Corpus = A × ( 1 − ((1+g)/(1+r))^N ) ÷ (r − g) × (1 + r)

• A — annual expense in the first year of retirement (today's expense grown by inflation)
• g — inflation rate, the pace at which each year's withdrawal rises
• r — post-retirement return, usually lower because the money turns conservative
• N — number of years the corpus must last

The closing × (1 + r) is there because your spending starts on the day you retire, not a year later. The first year's expense leaves the corpus before it has earned anything, so every later withdrawal is funded by a smaller balance — the pot has to be that much bigger from day one.

The term that matters is the real return, r − g: your return after inflation. If your corpus earns 7% while costs rise 6%, the real return is barely 1% — which is why the pot has to be so large. When r equals g the real return is zero and the formula collapses to A × N: the corpus is exactly N years of the first year's expense, so it grows linearly with how long you expect to live.

A worked example with the defaults

Take the default case — a 30-year-old spending ₹50,000/month, retiring at 60, with 6% inflation, 12% returns while working and 7% after, needing the corpus to last 25 years:

The 4% rule versus the real-return method

You may have read the American 4% rule: multiply your first-year annual expense by 25 (i.e. withdraw 4% in year one) and that corpus should last about 30 years. It is a useful sanity check, but it was calibrated for US markets with lower inflation. In India, where inflation and returns both run higher, the honest number depends on your real return. The table compares the two approaches for the default ₹34.46 lakh first-year expense:

The real-return method is more precise because it lets you set your own return, inflation and longevity rather than assuming a fixed 4%. Note that the 25× corpus lands below the 30-year real-return figure: at 6% inflation and a 7% post-retirement return, ₹8.62 crore funds about 28 years of rising withdrawals, not the 30 the rule advertises. Treat the 4% rule as a quick gut-check and this calculator as the detailed plan. Once you have accumulated the corpus, model the drawdown itself with our SWP Calculator, which shows exactly how long the money lasts under real withdrawals.

Building the corpus without feeling the pinch

A flat ₹21,856 SIP for 30 years does the job in the default case, but your income will not stay flat — so your SIP need not either. A step-up SIP that rises, say, 10% a year lets you start lower and let raises do the heavy lifting, because the bigger instalments land in the high-earning later years. If your employer offers the National Pension System or you have EPF and PPF balances, count those toward the same corpus target and reduce the SIP accordingly. Retirement is one goal funded by many buckets, not a single product.

How to use this calculator

• Set your current age and target retirement age — the gap is your saving runway.
• Enter your monthly expense today, not a guess at future spending; the tool inflates it for you.
• Use a conservative inflation figure (6–7% is a common Indian planning assumption).
• Keep the post-retirement return below the pre-retirement return — retirees shift to safer, lower-yielding assets.
• Revisit the plan every year; small changes in inflation or returns move the corpus a lot.

The result is a planning estimate, not a promise — markets and prices will not follow a straight line. But it turns a vague worry into two concrete numbers you can act on today.