What Is Retirement Corpus?
Retirement corpus is the total investable wealth you need at retirement to fund all living expenses for the rest of your life, without drawing down the principal. It grows with investment returns while expenses grow with inflation.
A useful shortcut is the "25x rule": you need 25 times your annual expenses at retirement. For Rs 60,000/month (Rs 7.2 lakh/year) expenses, the rough corpus target is Rs 1.8 crore. This assumes a 4% safe withdrawal rate, which may be aggressive for India due to structurally higher inflation.
This calculator uses the more precise growing annuity formula, which accounts for both inflation-driven expense growth and post-retirement investment returns simultaneously. The result is almost always different from the 25x shortcut, and increasingly diverges over longer retirements.
How Is Retirement Corpus Calculated? The Growing Annuity Formula
The growing annuity formula calculates the lump sum needed to fund a series of payments that grow at inflation rate g, discounted at return rate r, for n months:
Example: Rs 50,000/month today, retiring in 30 years with 6% inflation and 8% post-retirement return, 25-year retirement. Expense at retirement: Rs 50,000 x (1.06)30 = Rs 2,87,175. Corpus needed: approximately Rs 6.75 crore using the growing annuity formula.
The donut chart above shows the split between your SIP contributions (typically 10-20% of total corpus) and investment returns (80-90%). That gap is why starting early is so powerful: compound growth, not your contribution rate, builds most of your corpus.
What Is a Safe Withdrawal Rate in India?
The safe withdrawal rate (SWR) is the maximum percentage of your corpus you can withdraw annually without running out of money over your retirement. The US 4% rule (from the Trinity Study, 1998) does not translate directly to India.
For India, 3-3.5% annual withdrawal is more conservative and appropriate for a 25-30 year retirement. Rs 1 crore corpus at 3% SWR supports Rs 2.5 lakh annual withdrawal (Rs 20,800/month). For FIRE scenarios covering 40+ years, 2.5-3% is more prudent.
Post-retirement portfolio strategy: A balanced allocation (60% debt, 40% equity) at age 60-70 has historically returned 8-10% in India. The Senior Citizens Savings Scheme (SCSS) currently pays 8.2% p.a., as notified by the Finance Ministry, forming a reliable debt core alongside government bonds. As you age, shift progressively toward SCSS and other government-backed instruments for capital protection.
NPS Calculator
Estimate your NPS corpus at 60, then subtract it from your retirement corpus target to find the gap you need to fill.
FIRE Corpus for Early Retirement in India
FIRE (Financial Independence, Retire Early) requires a larger corpus because retirement can last 40-50 years instead of 25. Check early retirement projections in our FIRE Calculator or evaluate historical price erosion using our Inflation Calculator.
For Rs 80,000/month (Rs 9.6 lakh/year) expenses, FIRE corpus is Rs 2.9-3.2 crore. Early retirement in India has additional considerations: no EPF or NPS maturity until age 60, longer equity exposure required to sustain the corpus, and rising healthcare costs in the 50-65 age band. You can also evaluate safe tax-exempt wealth compounding in our PPF Calculator or systematic income strategies in our SWP Calculator. Set life expectancy to 95-100 in this calculator when planning for FIRE.
NPS and Retirement Corpus: How They Fit Together
The National Pension System (NPS) is one of the most tax-efficient retirement savings vehicles in India. Contributions up to Rs 1.5 lakh per year qualify under Section 80CCD(1), and an additional Rs 50,000 is deductible under Section 80CCD(1B), saving Rs 15,600 in tax annually for those in the 30% slab.
Under 2026 PFRDA rules, non-government NPS subscribers can withdraw up to 80% as a lump sum, with a 20% minimum funding an annuity at roughly 5.7-8.1% p.a.
Only 60% of the withdrawal stays tax-free under Section 10(12A); any lump sum beyond that is taxed at your slab rate. Use the NPS Calculator to estimate your projected corpus and subtract it from this page's total.
For EPF, the standard calculation uses 12% of basic salary from both employee and employer, compounded at the EPFO-notified 8.25% p.a. rate. Use the EPF Calculator to project your EPF corpus, then subtract both from the total to find your mutual fund gap.
Retirement Corpus by Age and Monthly Expense
Approximate corpus needed (6% inflation, 8% post-retirement return, retirement at 60, life expectancy 85, 12% pre-retirement CAGR):
| Current Age | Monthly Expense Today | Expense at Retirement | Corpus Needed | Monthly SIP Needed |
|---|---|---|---|---|
| 25 yrs | Rs 30,000 | Rs 2.31 L/mo | Rs 5.42 Cr | Rs 8,343 |
| 30 yrs | Rs 50,000 | Rs 2.87 L/mo | Rs 6.75 Cr | Rs 19,120 |
| 35 yrs | Rs 70,000 | Rs 3.00 L/mo | Rs 7.06 Cr | Rs 37,209 |
| 40 yrs | Rs 1,00,000 | Rs 3.21 L/mo | Rs 7.54 Cr | Rs 75,440 |
| 45 yrs | Rs 1,50,000 | Rs 3.59 L/mo | Rs 8.45 Cr | Rs 1.67 L |
How to Use This Retirement Corpus Calculator
Five inputs determine your required corpus:
- Current monthly expenses: enter all household expenses today. The calculator inflates these to your retirement date automatically.
- Current age and retirement age: the gap is your savings horizon. Starting at 25 vs 35 can cut the monthly SIP required by 50% or more.
- Life expectancy: plan for at least 25 years post-retirement. Set 90 or 95 if you have a family history of longevity, or if you are planning for FIRE.
- More settings (inflation and return rate): click "More settings" to adjust the inflation rate (default 6%) and post-retirement portfolio return (default 8%). Adjust these together to stress-test different scenarios.
- Read the results: the dark box shows total corpus needed and monthly SIP required. The donut shows how much of that corpus will come from your contributions vs investment returns. The stat rows break down the expense at retirement, retirement duration, and compounding contribution.
Gratuity as Part of Your Retirement Corpus
Gratuity is a lump sum paid on retirement after 5+ years of service, calculated as Last Drawn Salary x 15 x Years of Service / 26 under the Payment of Gratuity Act.
For private-sector employees, gratuity is tax-exempt up to Rs 20 lakh under Section 10(10) of the Income Tax Act, per the Income Tax Department. Government employees get a full exemption with no ceiling.
Add your expected gratuity payout to Existing Retirement Corpus if you are close to retirement, since it is a real, one-time addition to your investable wealth.
EPFO Interest Rate and Your Retirement Corpus
EPF currently earns 8.25% per annum, as notified by the EPFO, credited annually on the running balance in your account.
This rate is reviewed and can change each financial year, so treat 8.25% as a strong current anchor rather than a permanent guarantee when projecting decades ahead.
Senior Citizen Savings Scheme in Retirement Planning
The Senior Citizen Savings Scheme (SCSS) pays 8.2% per annum for the July-September 2026 quarter, as notified by the National Savings Institute, unchanged for eight straight quarters.
Open to retirees aged 60+, SCSS pays interest quarterly and is a common government-backed anchor for the debt portion of a post-retirement portfolio.
The Unified Pension Scheme for Government Employees
The Unified Pension Scheme (UPS), effective from 1 April 2025, gives existing Central Government employees under NPS an assured payout of 50% of the last 12 months' average basic pay after 25 years of service, per PFRDA.
UPS does not apply to private-sector employees; this calculator's corpus-and-annuity model is the relevant one if you are not a Central Government employee.
PPF as a Tax-Free Retirement Anchor
The Public Provident Fund pays 7.1% per annum for the July-September 2026 quarter, as notified by the National Savings Institute, unchanged since April 2020.
PPF is Exempt-Exempt-Exempt (EEE): contributions, interest, and maturity are all tax-free, with a 15-year lock-in that suits long retirement horizons.
Voluntary Provident Fund and the Rs 2.5 Lakh Tax Threshold
VPF lets you contribute beyond the mandatory 12% of basic salary into your EPF account at the same EPFO-notified rate, currently 8.25%.
Under Budget 2021 rules, interest on combined EPF and VPF employee contributions above Rs 2.5 lakh per year (Rs 5 lakh for government employees with no employer contribution) becomes taxable.
Old vs New Tax Regime and Retirement Savings
Deductions for PPF, VPF, and NPS Section 80CCD(1B) (the extra Rs 50,000) are available only under the old tax regime.
Under the new regime, only your employer's NPS contribution under Section 80CCD(2) remains deductible, so compare both regimes before assuming these retirement deductions apply to you.
EPF and VPF Withdrawal Timing: The 5-Year Rule
EPF and VPF withdrawals are tax-free only after 5 years of continuous service; withdrawing earlier makes the amount taxable.
If you switch jobs, transfer your EPF account to the new employer instead of withdrawing, so your continuous-service clock keeps running toward retirement.
Build your retirement plan with a CA
A CA can calculate NPS + EPF corpus, model tax-efficient withdrawal strategies, and close the gap with the right investments.
Frequently Asked Questions
Disclaimer: All calculations on this page are indicative only. The growing annuity formula produces a mathematical estimate based on the inputs provided and assumes constant inflation and return rates throughout retirement. Actual returns vary year to year. This calculator is for educational and planning purposes only and does not constitute financial advice. Consult a SEBI-registered investment adviser before making retirement planning decisions. CAs can generate detailed retirement Tax Optimization Reports for clients at ca.fermor.in.