Retirement Planning in India: How Much Do You Actually Need?
Retirement planning is not about a magic number — it is about matching your future expenses to a corpus that survives inflation for 25–30 years.
Step 1: Estimate future monthly expenses
Take today's essential monthly expense (rent-free, if you own your home). Grow it at 6% inflation until retirement age.
- Today's essential expense: ₹50,000/month
- Years to retirement: 25
- At 6% inflation: ₹50,000 × 1.06^25 ≈ ₹2.14 lakh/month
Step 2: Corpus using the 25× rule
A rough guide is 25× your annual retirement expense — this supports a 4% safe withdrawal for ~30 years.
Annual retirement expense × 25 = corpus needed
Step 3: Work backwards using SIP maths
Use the SIP formula to find the monthly investment that reaches the target corpus at your expected return.
Inflation is the enemy
A retiree who needs ₹1 lakh/month today will need over ₹3 lakh/month in 20 years just to maintain the same lifestyle. Any plan that ignores inflation fails.
Pro tips
- Start early — a 10-year delay can double the monthly SIP required.
- Do not shift entirely to debt at 60. You may live 30 more years — keep 30–40% in equity.
Common mistakes
- Assuming EPF alone will fund retirement.
- Forgetting healthcare costs — plan for a ₹25–50 lakh medical buffer.
Frequently asked questions
What return should I assume?+
12% pre-retirement, 7–8% post-retirement is a reasonable Indian baseline.
Should I plan for one spouse or both?+
For couples, plan for the longer of the two lifespans and include shared expenses in the number.
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