How to calculate your retirement corpus

Your retirement corpus is the amount you need on the day you retire so that it can pay your expenses, rising with inflation, until the age you plan for. It is built in three steps: grow today’s expenses to retirement, value the stream of expenses after retirement, and work out the monthly saving that fills the gap.

Step 1: expenses at retirement

Expenses at retirement = today’s monthly expenses × (1 + inflation)^{years to retire}

₹40,000 × 1.06²⁵ ≈ ₹1,71,675 a month.

Step 2: the corpus

The retirement calculator pays expenses at the start of each month, keeps them rising with inflation, and lets the remaining corpus earn the after-retirement return. The corpus is the amount that runs to zero exactly at the planning age. For 25 years of expenses at 7%, it is about ₹4.59 crore.

Step 3: the monthly investment

Your current ₹5,00,000, earning 10% for 25 years, grows to about ₹60,28,473. The rest of the corpus has to come from monthly investments at 10%: about ₹29,818 a month.

What moves the answer most

• Inflation: at 6%, expenses double in about 12 years. See the impact of inflation.
• When you start: waiting five years raises the monthly amount by about a quarter in this example.
• How long you plan for: running out late in life is the bigger risk, so many planners use 85 to 95.
• Other income: subtract any pension or rent you expect from monthly expenses before you enter them.

After you retire

The corpus is then drawn down month by month. An SWP calculator shows how long a given amount lasts; see how an SWP works. If part of your savings is in NPS, the exit rules decide how much comes as a lump sum; see NPS withdrawal rules.

How to use the calculator

1. Enter your age, retirement age and the age to plan until.
2. Enter today’s monthly expenses and an inflation rate.
3. Enter returns before and after retirement, and what you have saved.
4. Drag the sliders. Retiring a little later or starting sooner changes the answer a lot.