Retirement calculator
Two numbers decide a retirement: the corpus it needs, and the monthly amount that builds it. Both depend far more on inflation than most people expect, so inflation is applied to every year, before and after you stop working.
Your situation
Enter today's expenses at today's prices. The inflation is added for you.
Building the corpus, year by year
| Age | Invested so far | Corpus | Monthly expense then |
|---|
How this is worked out
First, today's monthly expense is grown by inflation until the year you retire. That is what the same life costs then, and it is usually a shock — at 6% inflation, ₹50,000 a month becomes about ₹2.87 lakh in thirty years.
Second, the corpus. After retiring, the money still earns a return but prices still rise, so what matters is the real return: (1 + return) divided by (1 + inflation), minus one. The corpus is the amount that pays the first year's expenses and keeps paying an inflating amount for the rest of the plan, at that real return. When the real return is near zero the sum reduces to expenses multiplied by the number of years, which is the sensible answer.
Third, the monthly investment. Anything already saved is grown to the retirement date first and taken off the target. What remains is filled by a monthly investment, using the future value of a series of equal payments at one twelfth of the return while working.
What this is not
It assumes steady returns, steady inflation, and that you spend at the same rate throughout retirement. None of those is exactly true. It ignores pension, rent, EPF, property and anything else you may have, and it applies no tax. Treat the corpus as a target to aim at, not a number to trust to the rupee.
Mutual fund investments are subject to market risks. Read all scheme-related documents carefully. Nothing here is investment advice.