Retirement Corpus Calculator - Plan Your Retirement Savings
Our Retirement Corpus Calculator helps you determine how much money you need to save for a comfortable retirement. Retirement planning is one of the most important aspects of financial planning, and calculating your retirement corpus is the first step towards securing your financial future.
What is a Retirement Corpus?
A retirement corpus is the total amount of savings and investments you need to accumulate by the time you retire to maintain your desired lifestyle throughout your retirement years. This corpus should be sufficient to cover all your expenses after you stop earning a regular income from employment.
How to Use the Retirement Corpus Calculator
- Enter your current age: Your current age determines how many years you have to save for retirement.
- Set your retirement age: The age at which you plan to retire and stop earning regular income.
- Estimate your life expectancy: How long you expect to live during retirement.
- Input your current monthly expenses: Your current living expenses that will need to be covered during retirement.
- Adjust inflation rate: The expected annual inflation rate that will increase your future expenses.
- Set expected investment returns: The average annual return you expect from your retirement investments.
- Enter current retirement savings: Any retirement savings you've already accumulated.
- Input monthly retirement savings: How much you're currently saving each month for retirement.
- Select retirement expense ratio: What percentage of your current expenses you'll need during retirement.
Key Factors in Retirement Corpus Calculation
- Inflation: Reduces purchasing power over time, increasing future expense requirements.
- Time to Retirement: More years until retirement means more time for compounding to work.
- Investment Returns: Higher returns can reduce the corpus needed but come with higher risk.
- Retirement Duration: Longer retirement requires a larger corpus.
- Expense Ratio: Many retirees need 70-80% of pre-retirement expenses, not 100%.
Retirement Corpus Formula
The retirement corpus is calculated using the following formula:
Monthly expenses at retirement = Current monthly expenses × (1 + inflation rate)^Years to retirement
Annual retirement income needed = Monthly expenses at retirement × 12 × Retirement expense ratio
Retirement corpus required = Annual retirement income needed × [(1 - (1 + investment return)^-Retirement years) / Investment return]
Frequently Asked Questions (FAQ)
What is a good retirement corpus amount?
A good retirement corpus depends on your individual circumstances, lifestyle expectations, and retirement goals. As a general rule, you should aim for a corpus that is 25-30 times your annual pre-retirement expenses. For example, if your annual expenses are ₹600,000, you should target a retirement corpus of ₹1.5 to ₹1.8 crores.
How much should I save monthly for retirement?
The monthly savings needed for retirement depends on your age, expected retirement age, current savings, and expected returns. As a general guideline:
- Starting at age 25: Save 10-15% of your income
- Starting at age 35: Save 20-25% of your income
- Starting at age 45: Save 30-40% of your income
Use our calculator to get a personalized monthly savings target.
Should I consider inflation in retirement planning?
Yes, inflation is one of the most critical factors in retirement planning. Even moderate inflation of 6% per year will cause prices to double approximately every 12 years. This means that ₹50,000 today will be equivalent to about ₹1,60,000 in 20 years. Your retirement corpus must account for this loss of purchasing power.
What investment return should I assume for retirement planning?
For conservative retirement planning, assume a return of 8-9% for equity investments and 6-7% for debt investments. A balanced portfolio might return 7-8%. It's better to be conservative in your estimates rather than overly optimistic. Remember that higher returns typically come with higher risk.
Can I retire early with my current savings?
Early retirement requires a larger corpus because you'll have more retirement years to fund and fewer working years to save. Use our calculator with your desired early retirement age to see if your current savings and savings rate are sufficient. You may need to increase your savings rate or consider semi-retirement options.
Disclaimer: This retirement corpus calculator provides estimates based on the inputs you provide. The actual results may vary due to changes in inflation rates, investment returns, and personal circumstances. This calculator is for educational and planning purposes only and should not be considered as financial advice. Consult with a qualified financial advisor for personalized retirement planning.