How much money do you need to retire?

Retirement is the one goal everyone has, and the easiest one to put off. The question that stops most people is "how much is enough?". You can answer it yourself in four steps, and our Retirement planner does the arithmetic for you.

Step 1: Start with what you spend today

Take your household's monthly spending today: rent, groceries, bills, school fees, travel. Leave out loan EMIs that will be paid off before you retire, and costs that will end, such as children's education.

Step 2: Add the years of rising prices

Prices rise every year. At 6% inflation, what costs ₹60,000 a month today will cost about ₹2.58 lakh a month in 25 years. Your retirement money has to pay those future prices, not today's.

Step 3: Decide how long the money must last

Your money has to give you a monthly income, like a pension, for as long as you live. Many people plan till 85 or 90. If your family tends to live long, plan longer: running out of money at 82 is far worse than leaving some behind.

Step 4: Work out the corpus, then what you have

The corpus is the lump sum that can pay that monthly income for all those years, while the money still invested keeps earning a modest return. Then subtract what your existing savings (EPF, PPF, NPS, mutual funds) will have grown to by then. What is left is what you need to build.

A worked example

Suresh is 35, his family spends ₹60,000 a month and he has ₹5 lakh saved. He wants to stop working at 60 and plan income till 85.

He has three ways to build it, investing in growth-oriented funds at an assumed 12% a year:

A step-up SIP starts small and grows with his income, which is why it suits most salaried investors.

What changes the answer most

• Starting later. A 40-year-old with the same spending and savings, also retiring at 60, needs a step-up SIP of ₹16,373 a month to start, about 57% more than Suresh at 35. Every year of delay makes it costlier.
• Retiring earlier. If Suresh stops at 58 instead of 60, the starting SIP rises to ₹12,862: fewer years to save, more years to fund.
• Living longer. Planning till 90 instead of 85 raises the corpus to ₹3.63 crore.
• Inflation. At 7% instead of 6%, the corpus rises to ₹4.35 crore. Small changes in inflation make a big difference over 25 years.

Before you rely on the number

• The returns are assumptions, not promises. Markets can return more or less, so review your plan every year or two.
• The planner keeps your monthly income the same after you retire. Prices keep rising in retirement too, so many people keep part of their money in growth investments after retiring, or plan a little extra.
• Health costs rise faster than most expenses. Keep a health insurance policy that continues after you retire, separate from this corpus.
• Your EPF, PPF and NPS count towards the corpus. Add them in so you don't over-save.

Try your own numbers in our Retirement planner. It asks a few simple questions and shows the corpus, the monthly SIP and your savings year by year, till the age you choose.