Corpus needed + monthly SIP.
Corpus needed at retirement
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Monthly SIP required
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First-year retirement expense
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Your breakdown
Updates live as you type| Item | Amount |
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Worked example
Take a 35-year-old who spends Rs 60,000 a month today, plans to retire at 60, expects to live to 85, and assumes 6 percent inflation, an 11 percent pre-retirement return, and a 7 percent post-retirement return. First, today’s expenses are inflated over the 25 years to retirement: Rs 60,000 a month, or Rs 7,20,000 a year, grown at 6 percent for 25 years becomes a first-year retirement expense of about Rs 30,90,147. During retirement the corpus still earns 7 percent while costs rise at 6 percent, so the real return is only about 0.94 percent. Funding 25 years of inflation-linked expenses at that thin real return needs a corpus of about Rs 6,85,33,257 at age 60. To build it over 25 years at an 11 percent return, the required monthly SIP is about Rs 43,482. The headline corpus looks enormous mainly because inflation multiplies future expenses.
| Step | Value |
|---|---|
| Current monthly expenses | Rs 60,000 |
| Years to retirement | 25 |
| First-year retirement expense | Rs 30,90,147 |
| Real return in retirement | about 0.94 percent |
| Corpus needed at 60 | Rs 6,85,33,257 |
| Monthly SIP required | Rs 43,482 |
How it is calculated
The calculator works in three steps. It first inflates your current annual expenses to the year you retire, compounding them at the inflation rate over the years until retirement. It then sizes the corpus as the present value, at retirement, of a stream of expenses that keeps growing with inflation through your retirement years. To do this it uses a real rate of return, which is the post-retirement return adjusted for inflation rather than the nominal return, so the corpus is large enough that withdrawals keep pace with rising costs. Finally it computes the monthly SIP needed to accumulate that corpus over the years to retirement, using the pre-retirement return compounded monthly. The output is sensitive to the inflation and return assumptions, so it is best read as a planning range rather than an exact target.