Planning Your Retirement Corpus
Your Retirement Corpus is the total amount of wealth you need to accumulate by the day you stop working. This corpus must be large enough to replace your monthly salary, combat inflation, and last for the entirety of your life expectancy.
Unlike basic savings calculators, a Retirement Corpus Calculator factors in the silent killer of wealth: Inflation.
The Calculation Logic
To determine your required corpus, the calculator performs three steps:
- Inflates your current expenses: If you spend ₹50,000/month today, and retirement is 20 years away with 6% inflation, you will need approximately ₹1.6 Lakhs/month just to maintain your current lifestyle on the day you retire.
- Estimates lifespan: It calculates how many years the corpus must last (e.g., from age 60 to age 85).
- Applies Real Return: It calculates the required lump sum by factoring in the “Real Return” (Investment Return minus Post-Retirement Inflation).
Don't Include Discretionary Expenses
When entering your current monthly expenses, do not include your current EMIs, children’s school fees, or commuting costs. These expenses will likely disappear by the time you retire. Only include expenses that will persist into retirement (food, utilities, healthcare).