Retirement Calculator

Every retirement number rests on three guesses: how fast prices rise, what the money earns after you stop working, and how long you'll be living off it. This calculator fixes two of those and asks you for the third, then prints all three next to the answer so you can argue with them.

A worked case

A 30-year-old planning to stop at 60, spending 50,000 a month today, expecting 6% inflation:

• Years to retirement: 30
• Monthly expense at retirement: 2,87,174.56
• Real, inflation-adjusted return during drawdown: 1.89%
• Required corpus: 6,88,77,314

The second figure is the one that surprises people. After thirty years at 6%, today's 50,000 monthly budget becomes 2.87 lakh a month. That's a 5.7x increase from an inflation rate nobody would call alarming.

The three assumptions, and what happens if you doubt them

Post-retirement return is fixed at 8%. You can't edit it. If your money will sit mostly in deposits after you retire, 8% is probably generous and the corpus shown is too small. If you plan to keep a meaningful equity allocation, it may be on the conservative side.

Drawdown lasts 25 years. That's counted from the retirement date, not from today. Retire at 60 and the plan funds you to 85. Retire at 55 with the same 25-year window and it funds you to 80. The tool doesn't lengthen the drawdown if you leave earlier, so if you're retiring early, treat the result as optimistic.

Inflation applies before and after retirement. The rate you enter pushes your expenses up on the way to retirement and keeps eating into them afterwards. That's why the calculation uses a real rate instead of the nominal 8%.

real annual = (1 + 0.08) ÷ (1 + inflation) − 1
monthly real rate = (1 + real annual)^(1/12) − 1
Corpus = future monthly expense × (1 − (1 + m)^−300) ÷ m × (1 + m)

The monthly rate uses the geometric twelfth root. Over a 300-month horizon, the shortcut of dividing the annual rate by twelve drifts far enough to change the corpus.

When inflation equals the return

If you set inflation to exactly 8%, the real return is zero. The annuity formula divides by that rate, so the general case breaks down. The calculator spots this and falls back to the limiting answer: the corpus equals the monthly expense multiplied by 300 months. For a 40-year-old spending 60,000 a month, that's 2,79,657.43 × 300 = 8,38,97,229. Nothing grows in real terms, so you need every month's money saved in advance.

What this number doesn't cover

It's a target. It says nothing about how you get there, and it leaves out a lot:

• Employer pensions, provident fund balances, gratuity, annuities, and state pensions.
• Rental income, part-time earnings, and any inheritance.
• Tax on withdrawals, which can be substantial depending on where the corpus sits.
• Healthcare, which has historically inflated faster than the general index and tends to come in lumps, not monthly instalments.
• Any wish to leave an estate. The model deliberately spends the corpus down to zero.

If you already have a substantial retirement balance, subtract it from this figure yourself. There's no field for existing savings.

Companion calculators

To model building up toward the target, use the SIP calculator. To model drawing an income from the finished corpus, use the SWP calculator. For the tax-exempt statutory part of most Indian retirement plans, see the PPF calculator.