Retirement Calculator

A retirement calculator estimates the money you need on the day you retire to cover living costs for life, and the monthly investment needed to get there. It accounts for inflation, investment returns and the savings you already have.

How to use this calculator

1. Enter your current age, planned retirement age and life expectancy.
2. Enter your current monthly expenses (excluding EMIs that will end).
3. Enter expected inflation per year.
4. Enter the expected pre-retirement return (while you are investing) and post-retirement return (on the corpus while you draw from it).
5. Enter existing savings set aside for retirement, such as EPF, PPF, NPS and mutual funds.
6. Read the corpus needed, the shortfall and the monthly SIP needed to fill it.

Formula

Years to retire        Y = retirement age − current age
Retirement years       N = life expectancy − retirement age
Monthly expense at retirement   Em = E × (1 + inf)^Y
Annual expense at retirement    A  = Em × 12
Real rate              r = (1 + post) ÷ (1 + inf) − 1
Corpus needed          = A × [1 − (1 + r)^−N] ÷ r × (1 + r)     (or A × N if r = 0)
Existing savings at retirement  FVs = S × (1 + pre)^Y
Shortfall              G = Corpus − FVs
Monthly SIP            = G ÷ { [((1 + i)^n − 1) ÷ i] × (1 + i) }

• E = current monthly expenses; S = existing savings
• inf, pre, post = annual inflation and returns as decimals
• i = pre ÷ 12 (monthly rate); n = Y × 12 (months)

The corpus is the present value, at retirement, of a growing annuity due: each year's expense is withdrawn at the start of the year and grows with inflation. The SIP formula assumes each instalment is invested at the start of the month.

Worked example

Age 30, retiring at 60, life expectancy 85. Current expenses ₹50,000 a month, inflation 6%, pre-retirement return 10%, post-retirement return 7%, existing savings ₹5 lakh.

• Y = 30, N = 25
• (1.06)^30 ≈ 5.7435, so Em = 50,000 × 5.7435 ≈ ₹2,87,175 a month
• A = 2,87,175 × 12 ≈ ₹34,46,095 a year
• r = 1.07 ÷ 1.06 − 1 ≈ 0.009434 (0.9434%)
• (1 + r)^−25 ≈ 0.79077
• Annuity factor = (1 − 0.79077) ÷ 0.009434 × 1.009434 ≈ 22.387
• Corpus = 34,46,095 × 22.387 ≈ ₹7.71 crore
• Existing savings: 5,00,000 × (1.10)^30 = 5,00,000 × 17.4494 ≈ ₹87.25 lakh
• Shortfall G ≈ ₹7.71 crore − ₹0.87 crore ≈ ₹6.84 crore
• i = 0.10 ÷ 12 ≈ 0.008333, n = 360, (1 + i)^360 ≈ 19.8374
• SIP factor = (19.8374 − 1) ÷ 0.008333 × 1.008333 ≈ 2,279.33
• Monthly SIP = 6,84,23,777 ÷ 2,279.33 ≈ ₹30,019

Things to keep in mind

• Inflation dominates. At 6%, ₹50,000 of expenses becomes about ₹2.87 lakh in 30 years. RBI's CPI inflation target is 4% within a 2-6% band, but healthcare costs, which rise with age, have often grown faster.
• Returns are not guaranteed. Equity-heavy portfolios may earn more before retirement, but returns vary year to year. Post-retirement money is usually kept in safer instruments, so its expected return is lower.
• Step-up SIPs. Raising the SIP by 5-10% every year with your income lowers the starting SIP considerably.
• Taxes and big expenses. The calculator is pre-tax and does not include one-time costs such as a child's wedding, a house purchase or medical emergencies. Keep separate goals and adequate health insurance.

The results are illustrative estimates for planning, not personalised advice.