Ask five people how much they need to retire and you'll likely get five different numbers — usually round figures picked more out of hope than calculation. The honest answer is that there's no universal number. But there is a reliable method for working out your own.
Start with expenses, not income
The most common mistake is anchoring the retirement number to current income. What actually matters is your expenses — because that's what your retirement corpus needs to fund, not your salary.
Start by estimating your current monthly household expenses, then adjust for retirement: some costs typically fall (commuting, work-related expenses, EMIs if paid off by then), while others typically rise (healthcare, in particular). For most people, retirement expenses land somewhere between 70–100% of pre-retirement spending — but this varies enough by lifestyle that it's worth estimating your own rather than assuming a percentage.
Don't forget inflation — twice
Inflation matters in two places, not one:
- Between now and retirement — your expenses in today's rupees will be higher by the time you actually retire.
- Throughout retirement itself — a 30-year retirement isn't funded by a fixed number; your expenses keep rising every year you're retired, too.
This second point is the one people most often miss. A corpus that comfortably covers year one of retirement can fall well short by year twenty if it isn't sized (and invested) with ongoing inflation in mind.
A simple framework
Here's a practical way to approach the calculation, without needing to be a spreadsheet expert:
- Estimate your annual expenses in retirement, in today's rupees.
- Inflate that figure forward to your retirement year, using a reasonable long-term inflation assumption.
- Estimate your retirement length — a healthy 60-year-old today may reasonably plan for a 25–30 year retirement, not less.
- Size a corpus that can sustain inflation-adjusted withdrawals for that entire period, factoring in that the corpus itself should keep growing during retirement, not sit idle.
This is exactly the kind of multi-variable calculation that benefits from a proper retirement calculator or a solutions-focused conversation — small changes in your inflation or life-expectancy assumptions can move the required corpus significantly.
The variable most people ignore: healthcare
Healthcare costs tend to rise faster than general inflation, and tend to rise precisely during the years you're least able to earn additional income to cover them. A retirement plan that doesn't separately account for healthcare — including a dedicated health insurance strategy that continues well into old age — is usually underestimating what it will actually need.
Start the number, then start the plan
The exact figure matters less than starting the exercise. Even a rough, honestly-calculated number gives you something to work backward from — how much to invest monthly, which asset mix gets you there, and how far off track (or on track) your current savings already are.
A retirement number without a start date and a monthly plan behind it is just a wish. The number matters — but only once it has a plan attached.
If you'd like help running your own numbers properly — expenses, inflation, life expectancy and all — that's exactly the kind of conversation worth having before you pick a single product.