What is a Retirement Corpus?
A retirement corpus is the total amount of money you need to have saved by the time you retire — so that your investments can generate enough income to cover your expenses for the rest of your life, without you needing to work.
For most Indians, this is the single most important financial planning number. Yet most people either don't know it, or significantly underestimate it.
Why Most Indians Get This Wrong
There are three common mistakes:
1. Underestimating expenses in retirement
Many people assume they'll spend less in retirement. While you won't have commute costs or work clothes, healthcare costs rise significantly. Travel increases. And you have more time to spend money. In reality, most retirees spend 70–90% of their pre-retirement income.
2. Ignoring inflation
₹1 lakh today will be worth significantly less 25 years from now. At 6% inflation, ₹1 lakh today becomes ₹4.3 lakh in 25 years. Your corpus needs to account for this — not just cover today's expenses.
3. Not accounting for longevity
With improving healthcare, Indians in their 30s today should plan to live until 85–90. A 30-year retirement is not unusual. Your corpus needs to last that long.
The Retirement Corpus Formula
The simplest way to estimate your retirement corpus:
Retirement Corpus = Annual Expenses at Retirement × 25
This is based on the "4% rule" — the idea that you can safely withdraw 4% of your portfolio every year without running out of money.
Example:
- Current monthly expenses: ₹80,000
- Years to retirement: 25
- Inflation rate: 6%
- Monthly expenses at retirement: ₹80,000 × (1.06)^25 = ₹3.43 lakh
- Annual expenses at retirement: ₹41 lakh
- Retirement corpus needed: ₹41 lakh × 25 = ₹10.3 crore
This might seem like a large number. But broken down over 25 years of saving and investing, it's more achievable than you think.
How to Build Your Retirement Corpus
Step 1: Know your current expenses
Start with what you spend today. Be honest — include everything from groceries and rent to outings and subscriptions.
Step 2: Project future expenses
Apply an inflation rate (typically 6–7% for India) to your current expenses over your working years.
Step 3: Calculate how long your money needs to last
If you plan to retire at 55 and expect to live until 85, your corpus needs to last 30 years.
Step 4: Work backwards to find monthly SIP needed
Once you know your target corpus and timeline, you can calculate how much to invest monthly.
Step 5: Choose the right investment mix
- Equity mutual funds (12–15% returns): ideal for long-term wealth creation
- Fixed deposits / debt funds (5–7%): for stability as you near retirement
- Gold (8–10%): hedge against inflation
- Real estate: illiquid but appreciating
A common thumb rule: subtract your age from 100 to get your equity allocation percentage. At 30, keep 70% in equity. At 50, reduce to 50%.
The Impact of Starting Early
This cannot be overstated. The difference between starting at 25 vs 35 is enormous:
| Start Age | Monthly SIP | Corpus at 60 (12% returns) |
|---|---|---|
| 25 | ₹15,000 | ₹5.2 crore |
| 30 | ₹15,000 | ₹2.8 crore |
| 35 | ₹15,000 | ₹1.5 crore |
Starting 10 years earlier nearly doubles your corpus — with the same monthly investment.
Common Questions
Should I include my PF/EPF in my retirement corpus?
Yes. Your EPF, PPF, NPS, and any other retirement-specific savings should all count towards your corpus. Many people are surprised to find their EPF balance is substantial — it's worth checking regularly.
What about my home? Should I count it?
Your primary residence is not liquid and shouldn't be counted. However, if you plan to downsize or rent it out in retirement, that can supplement your income.
How do I account for healthcare costs?
Healthcare inflation in India runs at 10–12% — much higher than general inflation. It's worth adding a separate healthcare buffer of ₹50–75 lakh (in today's money) to your retirement corpus.
Use a Financial Planning Calculator
Rather than doing all this manually, use GetSetPlan's free financial planning calculator. It takes your income, expenses, savings, and goals — and builds a month-by-month plan showing exactly:
- Your target retirement corpus
- How much to save each month
- Whether you're on track
- The exact impact of each goal (home, children's education, travel)
Start planning your retirement for free →
The Bottom Line
Most Indians need between ₹5 crore and ₹15 crore to retire comfortably, depending on their current lifestyle and retirement age. The exact number depends on your expenses, inflation assumptions, and how long you plan to live.
The most important thing is to start calculating — and start saving. Every year you delay has a significant compounding cost.