How this Retirement Calculator works
This planner starts from what you spend today. It grows your monthly expense with inflation to your retirement age (optionally reduced, since some costs fall after you stop working), works out the corpus needed to pay for those expenses right through retirement, and then tells you the monthly investment required — after allowing for savings you already have and any lump-sum retirement benefits you expect.
How it is computed
Monthly need at retirement = E × (1 + g)Y × (1 − cut)
Corpus = Monthly need × [ 1 − (1 + p)−M ] / p
Monthly SIP = (Corpus − FV of savings − benefits) × w / [ (1 + w)N − 1 ]
- E = present monthly expense, g = inflation, Y = years to retirement, cut = expense reduction
- p = monthly return in retirement, M = months in retirement
- w = monthly return in working years, N = months to retirement
Worked example
Aged 27, spending ₹25,000 a month, retiring at 60 and planning to age 80 (6% inflation, 12% return while working, 8% in retirement, no expense reduction, no existing savings): your expense grows to about ₹1,71,015 a month by retirement. Funding 20 years of that needs a corpus of roughly ₹2,04,45,547, which requires investing about ₹4,054 per month until retirement. The chart shows the corpus building up to age 60 and then drawing down through retirement.
Things to keep in mind
- This model keeps your monthly expense flat during retirement (in retirement-day rupees). If you expect costs to keep rising after retirement too, treat the corpus as a minimum and aim higher.
- Entering your current savings and expected retirement benefits (gratuity, PF, etc.) lowers the monthly investment you still need.
- Returns and inflation are assumptions, not guarantees — review the plan periodically and step up your investment as your income grows.
