How the Retire Early Calculator works
Retiring early means your savings must cover many more years of living costs — costs that keep rising with inflation. This tool works in two phases: first it estimates the corpus you need on your retirement day, then it calculates the monthly SIP required to build that corpus by the age you want to retire.
How it is computed
- Your current monthly expense is inflated to its value at your retirement age.
- The corpus is the inflation-adjusted present value of all your expenses through retirement — enough to keep paying rising expenses (earning your post-retirement return) until your life expectancy.
- The required SIP is then worked back from that corpus using your pre-retirement return.
Corpus = E × [ 1 − ((1 + g)/(1 + r))N ] / (r − g)
Where E = first-year retirement expense, g = inflation, r = post-retirement return, N = years in retirement.
Worked example
A 30-year-old spending ₹50,000 a month who wants to retire at 50 and plan until age 85 (6% inflation, 12% pre-retirement and 7% post-retirement returns) would see their monthly expense grow to about ₹1,60,357 by retirement. To fund 35 years of such expenses they would need a corpus of roughly ₹5.39 crore, which requires investing about ₹53,945 per month for the next 20 years. The chart shows the corpus building up to age 50 and then being drawn down to zero by age 85.
Things to keep in mind
- The plan assumes the corpus is drawn down to exactly zero at your life expectancy, leaving no buffer — living longer, higher inflation, or lower returns would require a larger corpus.
- Returns are not guaranteed, and a market downturn early in retirement can hurt a lot; many planners keep a margin of safety or extra years.
- Early retirement also means more years without employer health cover, so budget separately for healthcare and emergencies.
