The Retirement Corpus Formula

The widely used guideline is the 25× rule (derived from the 4% safe withdrawal rate):

> Retirement Corpus = Annual Expenses × 25

If your current annual expenses are ₹12 lakh, you need ₹3 crore.

Why India Needs a Higher Multiplier

The 25× rule was developed for US retirees. India has some differences:

  • Higher inflation (6–7%) vs. the US assumption of 3%.
  • Rising healthcare costs — the fastest-growing expense post-60.
  • Longer lifespans — plan for 30 years of retirement (age 60 to 90).
  • No universal social security — you are entirely self-reliant.

    • Indian financial planners typically recommend 30–35× your current annual expenses, adjusted for expected retirement lifestyle.

    A Step-by-Step Calculation

    1. Estimate current monthly expenses: ₹80,000/month = ₹9.6 lakh/year. 2. Adjust for inflation to retirement: At 6% inflation, in 25 years, ₹9.6 lakh becomes ~₹41 lakh/year. 3. Apply the 30× multiplier: ₹41 lakh × 30 = ₹12.3 crore target corpus. 4. Subtract existing assets: EPF, PPF, NPS, existing investments. 5. The gap is what your SIP needs to build.

    Building Toward the Target

    Use a SIP calculator with a 12% equity return assumption. For ₹12 crore in 25 years:

  • Start with ₹50,000/month SIP today, and increase by 10% every year.
  • Or ₹35,000/month if you increase by 15% annually.

    • Other Sources of Retirement Income

  • Rental income from a second property reduces corpus need.
  • EPF — ensure you don't withdraw it early (each withdrawal resets compounding).
  • PPF — tax-free, can be extended indefinitely post maturity.

    • > Altius Tip: Re-run this calculation every 3 years. Lifestyle inflation, income changes, and family events all shift the target. Staying calibrated is as important as starting.