Retiring at 60: how big a corpus will you need?
Retirement is the one goal everyone has and almost no one calculates. Because it feels far away, it is easy to postpone. But it is also the goal with no loan available, so let’s put a number on it.
Step 1: Today’s expenses, tomorrow’s prices
Start with what your household spends each month today. In our example, it is ₹50,000. You are 35 and plan to retire at 60, which is 25 years away. At an assumed 6% inflation, the same lifestyle would cost about ₹2.1 lakh a month at 60.
Step 2: The corpus that pays for retirement
Your retirement corpus needs to fund those expenses, rising with inflation every year, until about age 85, while the remaining money stays invested. Assuming a 7% return after retirement, the corpus needed at 60 comes to about ₹5.74 crore.
Step 3: The monthly SIP
To build ₹5.74 crore over 25 years at an assumed 10% a year before retirement, the SIP needed is about ₹42,905 a month. That can feel like a lot, so look at the alternatives.
| Scenario | Corpus needed | Monthly SIP |
|---|---|---|
| Start at 35, retire at 60 | ₹5.74 crore | ₹42,905 |
| Start at 38, retire at 60 | ₹5.74 crore | ₹59,725 |
| Start at 35, retire at 58 | ₹5.47 crore | ₹50,892 |
Assumes 6% inflation, 10% return before and 7% after retirement, and expenses lasting to age 85. Illustrative, not guaranteed.
A three-year delay raises the monthly SIP by about 39%. Retiring two years earlier raises it by about 19%. Time is the biggest lever you have.
Ways to make it manageable
- Step up every year. A SIP that grows with your salary needs a much smaller starting amount.
- Count what you already have. EPF, PPF, NPS and existing investments all reduce the gap.
- Keep health cover into retirement. Medical costs are the biggest threat to a retirement corpus.
- Review every year. Expenses, income and markets change, and so should the plan.
Find your own retirement number
Open the Retirement planner, enter your age, expenses and retirement age, and tick “Compare: what if I start 3 years later?” to see what waiting would cost.
Try your own numbers
The examples above use assumptions. Your family’s figures will be different.
This article is general information for education, not a recommendation to buy or sell any product. Figures are illustrative and not guaranteed; they depend on the assumptions shown. Mutual fund investments are subject to market risks, read all scheme related documents carefully. Past performance is not indicative of future returns.
