Retirement Corpus Calculator

## What is the Retirement Corpus Calculator? The Retirement Corpus Calculator uses the Human Life Value approach to determine how much you need to save before retirement to maintain your current lifestyle indefinitely. It factors in your current monthly expenses, expected inflation (3 to 5% annually erodes purchasing power), years to retirement, expected post-retirement returns, and life expectancy. ## Formula Used Corpus Needed = (Monthly Expenses x 12 x Retirement Years) / Withdrawal Rate Or using present value approach: Corpus Needed = Future Annual Expenses x [(1 - (1+r)^-n) / r] Where: Future Annual Expenses = Current Expenses x (1 + Inflation)^Years to Retirement r = Post-retirement return rate (typically 6 to 8%) n = Years in retirement (typically 25 to 30 years) ## Worked Example Current monthly expenses: Rs 50,000, Inflation: 5%, Years to retirement: 25, Post-retirement return: 6%, Years in retirement: 25 Inflated monthly expenses at retirement: Rs 50,000 x (1.05)^25 = Rs 1,69,440/month Annual expenses at retirement: Rs 20,33,280 Corpus needed = Rs 20,33,280 x 25 / 0.06 x (1.06) (approximately) = Rs 5.07 crore ## Frequently Asked Questions 1. How much corpus do I need to retire in India? A commonly used rule: 25x your annual expenses at retirement provides a rough target. For Rs 50,000/month today with 5% inflation over 25 years, your monthly expenses will be Rs 1,69,440. Annual expenses = Rs 20,28,000. Target corpus = Rs 20,28,000 x 25 = Rs 5.07 crore. 2. What is the safe withdrawal rate for retirement? The safe withdrawal rate (SWR) is the percentage of your corpus you can withdraw annually without running out of money. A 4% SWR is considered safe for a 30-year retirement in India. 3. How does inflation affect retirement planning? At 5% inflation, your expenses double every 14 years. Rs 50,000/month today becomes Rs 1 lakh/month in 14 years and Rs 2 lakh/month in 28 years. 4. Should I include my EPF/PPF/NPS in retirement corpus calculation? Yes, your existing EPF, PPF, NPS Tier 1, and any other retirement savings should be deducted from the required corpus. 5. Is 25 years of retirement enough for Indians? With increasing life expectancy (currently 70+ years for men, 73+ for women in India), planning for 25 to 30 years of retirement is prudent.