Input Parameters
Current Age
Your current age in years. Retirement planning should ideally start in your 20s or 30s.
30 years
Retirement Age
Age at which you plan to retire. Standard retirement age is 60, but early retirement is possible with proper planning.
60 years
Life Expectancy
Expected age till which you'll live. In India, average life expectancy is around 70-75 years, but plan for longer to be safe.
85 years
Current Monthly Expenses
Your current monthly living expenses including household, medical, leisure, etc. This will increase with inflation.
₹40,000
Expected Inflation Rate
Annual inflation rate. In India, long-term average inflation is 6-7%. Higher inflation requires larger retirement corpus.
6%
Pre-Return Return
Expected annual return on investments BEFORE retirement. Equity investments typically yield 10-12%, while debt yields 7-8%.
10%
Post-Return Return
Expected annual return on investments AFTER retirement. Typically lower as you shift to safer instruments like debt funds, FDs, annuities.
7%
Existing Retirement Corpus
Current savings already accumulated for retirement (EPF, PPF, NPS, mutual funds, etc.)
₹5,00,000
Monthly Investment
Amount you can invest monthly towards retirement (SIPs, PPF, NPS, etc.)
₹15,000
Include inflation adjustment in calculations
Investment Options
Retirement Plan Summary
Required Retirement Corpus
₹3.2 Cr
To maintain lifestyle after retirement
Monthly Pension Needed
₹1.8 L
At retirement (inflation-adjusted)
Monthly Investment Needed
₹15,420
To achieve retirement goal
Years to Retirement
30
Time available for planning
Corpus Breakdown
Detailed Retirement Projection
| Age | Year | Annual Expenses | Annual Investment | Corpus Growth | Total Corpus |
|---|
Calculation Assumptions
Inflation rate affects both expenses and post-retirement returns
Returns are compounded annually and calculated before tax
Monthly investments increase by 5% annually (step-up SIP)
Life expectancy of 85 years used for pension duration
Comprehensive Guide to Retirement Planning & Pension Calculation
Retirement planning is crucial for financial independence and maintaining your lifestyle after you stop working. Our advanced pension calculator helps you estimate the retirement corpus needed based on your current age, expenses, expected inflation, and investment returns.
How to Use the Pension Calculator Effectively
Follow these steps for accurate retirement planning:
- Estimate current expenses accurately: Include all regular expenses - housing, food, healthcare, travel, entertainment, insurance premiums, etc.
- Consider inflation: India's average inflation rate is 6-7%. Your expenses will multiply several times by retirement age.
- Choose realistic returns: Equity investments may give 10-12% long-term, while debt instruments yield 7-8%. Post-retirement, shift to safer options with lower returns.
- Account for existing corpus: Include EPF, PPF, NPS, mutual funds, and other retirement savings.
- Plan for longevity: With improving healthcare, plan for at least 20-25 years of retirement life.
Key Components of Retirement Planning
1. Retirement Corpus Calculation
The retirement corpus is the total amount needed at retirement to generate monthly pension for the rest of your life. It depends on:
- Monthly expenses at retirement: Current expenses adjusted for inflation
- Post-retirement returns: Lower returns as you shift to safer instruments
- Retirement duration: Years from retirement to life expectancy
- Inflation during retirement: Expenses continue to rise even after retirement
2. Monthly Investment Required
Based on your current age and years to retirement, calculate how much you need to invest monthly to achieve your retirement corpus. Consider increasing your SIP by 10% annually (step-up SIP) to beat inflation and reduce the burden.
3. Investment Strategy
Before retirement (accumulation phase): Focus on growth-oriented investments (equity mutual funds, NPS equity portion, stocks) with higher return potential.
After retirement (withdrawal phase): Shift to capital preservation (debt funds, FDs, annuities, SCSS) with regular income generation.
Retirement Investment Options in India
- Employee Provident Fund (EPF): Mandatory for salaried, 8-8.5% tax-free returns
- Public Provident Fund (PPF): 15-year tenure, 7-8% tax-free returns
- National Pension System (NPS): Voluntary, market-linked returns, additional tax benefits
- Mutual Funds (Equity & Debt): SIPs for long-term wealth creation
- Senior Citizens Savings Scheme (SCSS): Post-retirement, 7-8% returns with quarterly interest
- Annuities: Regular pension from insurance companies
Frequently Asked Questions
What is the 4% withdrawal rule in retirement planning?
The 4% rule suggests that you can withdraw 4% of your retirement corpus annually (adjusted for inflation) without depleting it for 30 years. For example, with a ₹5 crore corpus, you can withdraw ₹20 lakh annually (₹1.67 lakh monthly).
How much retirement corpus do I need in India?
A common rule is 25-30 times your annual expenses at retirement. If your annual expenses at retirement are ₹12 lakh, you need ₹3-3.6 crore corpus. However, use our calculator for personalized results based on your specific situation.
Is NPS better than PPF for retirement?
NPS offers higher potential returns (market-linked) and additional tax deduction (₹50,000 under 80CCD(1B)), but has equity exposure and annuity requirement. PPF offers guaranteed, tax-free returns with complete flexibility. A combination of both is ideal for most investors.
What is the ideal asset allocation for retirement planning?
Use "100 minus age" rule: Invest (100 - your age)% in equity and the rest in debt. At age 30, allocate 70% to equity and 30% to debt. Gradually reduce equity exposure as you approach retirement.
How to calculate pension from NPS?
At age 60, you must use at least 40% of NPS corpus to buy annuity (pension). The remaining 60% can be withdrawn lump sum (taxable). Monthly pension = Annuity corpus × Annuity rate (approx 5-6%).
Note: This pension calculator provides estimates based on the inputs provided. Actual returns may vary based on market conditions. Consider consulting a financial advisor for personalized retirement planning.