Retirement Calculator
Illustrate the retirement corpus you may need and the monthly SIP to build it, with every assumption shown.
Illustration only. The figures below follow from the assumptions listed under them.
Monthly SIP needed
Assumptions
- Expenses rise with inflation every year, before and after retirement.
- Each retirement year's expenses are taken at the start of that year.
- The money left earns the post-retirement return and runs out exactly at the plan-until age.
- Before retirement, savings and the SIP both compound monthly at the pre-retirement return ÷ 12; the SIP is invested at the start of each month.
- Returns and inflation are the same every year. Taxes, pensions and one-off costs are not included.
How the corpus is used in retirement
| Age | Expenses that year | Corpus left at year end |
|---|---|---|
| 60 | ₹27,56,876 | ₹6,30,89,240 |
| 61 | ₹29,22,288 | ₹6,43,78,639 |
| 62 | ₹30,97,626 | ₹6,55,70,684 |
| 63 | ₹32,83,483 | ₹6,66,47,305 |
| 64 | ₹34,80,492 | ₹6,75,88,490 |
| 65 | ₹36,89,322 | ₹6,83,72,110 |
| 66 | ₹39,10,681 | ₹6,89,73,729 |
| 67 | ₹41,45,322 | ₹6,93,66,396 |
| 68 | ₹43,94,041 | ₹6,95,20,419 |
| 69 | ₹46,57,684 | ₹6,94,03,127 |
| 70 | ₹49,37,145 | ₹6,89,78,601 |
| 71 | ₹52,33,373 | ₹6,82,07,394 |
| 72 | ₹55,47,376 | ₹6,70,46,220 |
| 73 | ₹58,80,218 | ₹6,54,47,621 |
| 74 | ₹62,33,031 | ₹6,33,59,611 |
| 75 | ₹66,07,013 | ₹6,07,25,280 |
| 76 | ₹70,03,434 | ₹5,74,82,375 |
| 77 | ₹74,23,640 | ₹5,35,62,847 |
| 78 | ₹78,69,058 | ₹4,88,92,354 |
| 79 | ₹83,41,202 | ₹4,33,89,732 |
| 80 | ₹88,41,674 | ₹3,69,66,422 |
| 81 | ₹93,72,174 | ₹2,95,25,845 |
| 82 | ₹99,34,505 | ₹2,09,62,734 |
| 83 | ₹1,05,30,575 | ₹1,11,62,410 |
| 84 | ₹1,11,62,410 | ₹0 |
Each year: that year's expenses are taken out, then the rest earns the post-retirement return.
How it works
1. Today's monthly expenses E grow with inflation g until retirement, Y years away:
Monthly expenses at retirement = E × (1 + g)Y · A = 12 × that
2. Expenses keep rising with inflation in retirement, and the corpus earns the post-retirement return r. Each year's expenses are taken at the start of the year, for N years, so the corpus needed is:
Corpus = A × (1 − qN) ÷ (1 − q), where q = (1 + g) ÷ (1 + r)
(If g = r, the corpus is simply A × N.)
3. Before retirement, everything compounds monthly at i = p ÷ 12, where p is the pre-retirement return, over n = 12 × Y months. Savings S already set aside grow to:
Savings at retirement = S × (1 + i)n
4. The gap is filled by a SIP invested at the start of each month (the same formula as our SIP calculator):
Monthly SIP = Gap ÷ [((1 + i)n − 1) ÷ i × (1 + i)]
A rupee saved today grows exactly like the SIP's first instalment, so savings and SIP are treated the same way.
All rates are used as decimals. If savings already cover the corpus, the SIP needed is ₹0.
Worked example
You are 30, plan to retire at 60 and want money until 85. You spend₹40,000 a month today, assume 6% inflation, 12% returns before retirement and 7% after, and have ₹5,00,000 saved.
- Y = 30 years to retirement, N = 25 years in retirement
- Monthly expenses at retirement = ₹40,000 × 1.0630 = ₹2,29,739.65, so A = ₹27,56,875.76 for the first year
- q = 1.06 ÷ 1.07 = 0.990654
- Corpus = ₹27,56,875.76 × (1 − 0.99065425) ÷ (1 −0.990654) = ₹6,17,18,783 (6.17 crore)
- Savings at retirement = ₹5,00,000 × 1.01360 = ₹1,79,74,821 (compounded monthly, like the SIP)
- Gap = ₹6,17,18,783 − ₹1,79,74,821 = ₹4,37,43,962
- SIP factor for 360 months at 1% a month = 3,529.91, so the monthly SIP = ₹4,37,43,962 ÷ 3,529.91 = ₹12,392.36
Frequently asked questions
What does this retirement calculator estimate?
It gives a rough illustration of how much money you might need when you retire to cover your expenses until a chosen age, and the monthly SIP that could build that amount. It is not a retirement plan: the result depends entirely on the assumptions listed above the results.
What assumptions does it make?
Your expenses rise with inflation every year, before and after retirement. Each retirement year's expenses are taken at the start of that year. The money left earns the post-retirement return and runs out exactly at the plan-until age. Before retirement, your existing savings and a monthly SIP invested at the start of each month both grow at the pre-retirement return, compounded monthly; the SIP fills any gap. Taxes, pensions, one-off costs and changes in lifestyle are not included.
Why are my monthly expenses so much higher at retirement?
Because of inflation. At 6% a year, ₹40,000 a month today becomes about ₹2,29,740 a month in 30 years for the same lifestyle. Try different inflation rates to see how sensitive the result is.
What return rates should I enter?
Enter rates you think are realistic for how you will invest, before and after retirement. Many people choose lower-risk investments after retiring, which usually means a lower expected return, so the post-retirement rate is often set lower. Try cautious rates too; the default values are only starting points.
Does it include EPF, PPF, NPS or a pension?
Not automatically. If you have retirement savings in such accounts, you can add their current value to "Savings already set aside", and they will be grown at the pre-retirement return. A regular pension is not modelled; you could reduce your monthly expenses by the amount it would pay to get a rough idea.
What if my savings already cover the corpus?
Then the monthly SIP needed is ₹0. The calculator still shows the corpus and what your savings may grow to, so you can see the margin. Remember the estimate depends on the returns you enter actually being achieved.
How should I use the result?
Use it to understand the size of the goal and how inputs such as inflation, retirement age and returns change it. Revisit it every year as your income, expenses and savings change, and consider speaking to a qualified financial adviser before making decisions.