How to Calculate Your Retirement Corpus

Planning for retirement is arguably the most critical financial goal you will ever face. The biggest mistake people make is failing to account for inflation. Our Retirement Calculator not only projects how much your living expenses will cost decades from now, but it also reverse-engineers exactly how much you need to start investing today via a monthly SIP to achieve financial freedom.

Step 1: Calculating Future Expenses (The Inflation Factor)

An item that costs ₹50,000 today will cost significantly more in 30 years due to the decreasing purchasing power of money. We calculate your future expenses using the inflation formula:

At an average 6% inflation rate, living expenses roughly double every 12 years. If you need ₹50,000/month today at age 30, you will need over ₹2.8 Lakhs/month to sustain the exact same lifestyle at age 60.

Step 2: The 25x Rule (The Target Corpus)

Once we know your future annual expenses, we need to build a corpus large enough that you can live off it without depleting it prematurely. This calculator uses the globally recognized "25x Rule" (often associated with the 4% Safe Withdrawal Rate).

By saving 25 times your annual expenses, you can theoretically withdraw 4% of your total corpus every year during retirement while the underlying investments continue to grow, ensuring you never run out of money.

Frequently Asked Questions

What if I already have savings?

If you already have existing savings, mutual funds, or EPF balances, you can subtract their projected future value from the "Target Corpus" shown in the calculator. You only need to set up a SIP to cover the shortfall.