Retirement Calculator

Every retirement number is the output of three guesses: how fast prices rise, what the money earns after you stop working, and how long you live 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 middle figure is the one that startles people. Today's 50,000 monthly budget becomes 2.87 lakh a month after thirty years at 6% — 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%. Not editable. If your money will sit largely in deposits after you retire, 8% is likely generous and the corpus shown is too small. If you intend to keep a meaningful equity allocation, it may be conservative.

Drawdown lasts 25 years. 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 does not lengthen the drawdown for an earlier exit, so early retirees should read the result as optimistic.

Inflation applies before and after retirement. The rate you enter inflates your expenses on the way to retirement and continues to erode them afterwards. That is why the calculation runs on a real rate rather than 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)

Using the geometric twelfth root rather than dividing the annual rate by twelve matters over a 300-month horizon; the shortcut drifts by enough to move the corpus.

When inflation equals the return

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

What this number is not

It is a target, not a plan. It says nothing about how to get there, and it excludes a great deal:

• 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 historically inflates faster than the general index and arrives in lumps rather than monthly instalments.
• Any wish to leave an estate. The model deliberately spends the corpus to zero.

If you already hold a substantial retirement balance, subtract it from this figure yourself; there is no field for existing savings.

Companion calculators

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