Retirement Calculator (India)

What retirement planning is really asking

Two questions, in order. What will your life cost each year once you stop earning, in the rupees of that year rather than today's. And is the money you are putting aside now going to get you there.

Most people answer the second question without ever answering the first, which is why retirement shortfalls tend to be discovered late.

How the corpus is worked out

Three steps. Inflate today's expenses to your retirement year. Multiply by the number of years you expect to live after retiring. Subtract what you already have earmarked.

Future Annual Expense = Current Annual Expense × (1 + inflation)^years to retirement

Required Corpus = Future Annual Expense × years in retirement

Gap = Required Corpus − Retirement Assets you already hold

A more careful version accounts for the corpus continuing to earn returns through retirement, which reduces the required amount. The simple version above is deliberately conservative.

A worked example

You are 38 and spend ₹75,000 a month, so ₹9 lakh a year. You plan to retire at 60, which is 22 years away. At 6% inflation, that ₹9 lakh becomes about ₹32 lakh a year in 2048 rupees. If you expect 25 years of retirement, the headline corpus is roughly ₹8 crore.

That number tends to shock people. It should not. It is the same lifestyle you have now, priced in future rupees. It is also why starting at 38 rather than 48 changes the required monthly contribution by a factor of roughly three.

The inflation number does most of the damage

Change the inflation assumption from 5% to 7% in the example above and the required corpus moves by well over a crore. This single input matters more than your return assumption, and it is the one people pick casually.

Worth splitting it. General household inflation of 5 to 6% is reasonable for food, utilities and transport. Medical inflation runs far higher and lands disproportionately in your seventies and eighties. Planning both at the same rate understates the back half of retirement.

What you already have working for you

• EPF. Your and your employer's contributions, compounding tax-free, usually the single largest retirement asset for salaried Indians and the one most often left out of the calculation.
• NPS. Additional deduction available, but with restricted withdrawal before 60 and mandatory annuitisation of a portion at exit. Count it, but count it accurately.
• PPF. Tax-free at maturity, extendable in five-year blocks after the initial 15.
• Equity mutual funds. The part of the corpus that has to outrun inflation over a multi-decade horizon.

What the corpus number does not tell you

• It assumes your expenses stay proportionally similar. In practice commuting and children's costs fall, while healthcare and help around the house rise.
• It ignores any post-retirement income, whether rent, consulting or a pension.
• It says nothing about sequence risk. Retiring into a bad market is materially worse than the same fall five years later.
• It treats life expectancy as a fixed number, which it is not.

FOLO Tip: The retirement gap is not a fixed thing, it moves every time your net worth does. FOLO keeps that number live so the gap is something you watch close, rather than something you rediscover every few years.