Most people answer the retirement question the same way: “I think ₹1–2 crore should be enough.” It won’t be. That number comes from nowhere — not from actual calculation, not from any understanding of inflation, and certainly not from a realistic picture of what retirement in India costs today, let alone 20 or 30 years from now. This post will walk you through exactly how to calculate your retirement number. It’s not as complicated as it sounds. But the result will almost certainly be larger than you expected — and that’s actually a good thing to know now, while you still have time.

The Retirement Illusion

Let’s say you’re 35 today, spending ₹80,000 a month, and planning to retire at 60. You assume ₹2 crore will be enough. Here’s why that assumption is dangerous. India’s average inflation rate over the last two decades has been approximately 6% per year. At 6% inflation, ₹80,000 today becomes roughly ₹3.43 lakh per month by the time you’re 60. That’s the monthly expense you’ll need to fund — not ₹80,000. Now assume you live until 85. That’s 25 years of retirement to fund. At a conservative post-retirement return of 8% per year, the corpus required to generate ₹3.43 lakh per month for 25 years is approximately ₹4.5 crore. That’s more than double your ₹2 crore estimate — and we haven’t even added healthcare inflation, which runs at 10–12% per year in India.

The Three Numbers You Need to Know

Calculating your retirement corpus comes down to three inputs: 1. Your future monthly expenses Take your current monthly expenses and inflate them at 6% per year until your retirement age. This gives you what your lifestyle will actually cost at retirement. 2. Your retirement corpus Use your future monthly expenses to calculate how large a corpus you need — assuming it earns 7–8% post-retirement and lasts 25–30 years. 3. The SIP you need to start today Work backwards from your corpus target to find the monthly SIP amount you need to invest right now — assuming 12% long-term equity returns. Use our free Retirement Calculator to run these numbers in under a minute.

A Real-World Example

Here’s what the numbers look like for a 35-year-old planning to retire at 60: Current monthly expenses: ₹80,000 Future monthly expenses at 60 (at 6% inflation): ₹3.43 lakh Retirement corpus needed: ~₹4.8 crore SIP needed today (at 12% p.a.): ~₹28,000/month If you’re already investing ₹28,000/month in a diversified equity mutual fund SIP — you’re on track. If you’re not, the gap is something to address urgently, not eventually.

Healthcare: The Number Nobody Accounts For

Most retirement calculations ignore healthcare — and that’s a critical mistake. As you age, medical expenses increase sharply. India’s healthcare inflation runs at 10–12% annually, significantly higher than general inflation. A hospitalisation that costs ₹3 lakh today could easily cost ₹15–20 lakh by 2045. This is why a robust health insurance cover — both individual and a super top-up — is not optional. It protects your retirement corpus from being wiped out by a single medical event.

The Power of Starting Early

The single biggest factor in retirement planning is time. Consider two people: Arjun starts a ₹15,000/month SIP at age 28. By 60, at 12% returns, he accumulates approximately ₹5.2 crore. Priya starts the same ₹15,000/month SIP at age 38 — just 10 years later. By 60, she accumulates approximately ₹1.7 crore. Same amount. Same return. 10 years of difference. The outcome: Arjun has 3× more. That gap is compounding. And every year you wait, you lose it permanently.

What To Do Right Now

Three concrete actions you can take today: 1. Calculate your number. Use our Retirement Calculator to find your actual retirement corpus target based on your current age, expenses, and goals. 2. Start (or increase) your SIP. Even if you can’t hit your full monthly SIP target immediately, start with what you can. Increase it by 10% every year as your income grows. 3. Talk to an advisor. A personalized retirement plan accounts for your unique income trajectory, existing assets, family commitments, and risk appetite — things no calculator can fully capture. Schedule a call with us and we’ll build yours together. Retirement is not a distant event. For a 35-year-old, it’s 25 years away — which feels long, but in investing terms, it’s the most valuable 25 years you’ll ever have. Use them. Prominent Investor is an AMFI Registered Mutual Fund Distributor. The figures used in this article are illustrative. Please consult your advisor for a personalized retirement plan.
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