Retirement Calculator

Formula

• Years to retire Y = retirement age − current age
• Expense at retirement E = current expense × (1 + inflation)^Y
• Real post-retirement return rr = (1 + post) / (1 + inflation) − 1
• Corpus = E × 12 × [1 − (1 + rr)^(−N)] / rr (inflation-indexed annuity, N = years in retirement)
• Monthly SIP = (Corpus − existing × (1 + pre)^Y) × i / [((1 + i)^n − 1)(1 + i)]

The corpus must fund an income stream that itself rises with inflation, so the right discount rate is the real return — the post-retirement nominal return deflated by inflation — not the nominal one. Using the nominal rate is the single most common error in retirement planning and understates the corpus by 30–50%. The required SIP is then the annuity payment that grows the shortfall (after crediting existing savings) to that corpus by retirement.

Step-by-step calculation

1. 1

   Years to retirement

   60 − 32

   28 years

2. 2

   Years in retirement

   85 − 60

   25 years

3. 3

   Inflated monthly expense

   60,000 × (1 + 6%)^28

   ₹306,701

4. 4

   Real return

   (1 + 7%) / (1 + 6%) − 1

   0.943%

5. 5

   Corpus (indexed annuity PV)

   E×12 × (1 − (1+rr)^−N) / rr

   ₹81,624,206

6. 6

   Required SIP

   shortfall × i / (((1+i)ⁿ − 1)(1+i))

   ₹25,260