The number, and where it comes from
Start with the monthly income you want in today’s money. Inflate it to your retirement year. Multiply by twelve, then by the number of years the corpus must last, adjusted for the growth the corpus continues to earn. That last adjustment is why the arithmetic needs a calculator rather than a rule of thumb.
What inflation does over a working life is the part most people underestimate.
| Monthly need today | In 15 years at 6% | In 20 years at 6% | In 25 years at 6% |
|---|---|---|---|
| ₹50,000 | ₹1.20 lakh | ₹1.60 lakh | ₹2.15 lakh |
| ₹75,000 | ₹1.80 lakh | ₹2.41 lakh | ₹3.22 lakh |
| ₹1,00,000 | ₹2.40 lakh | ₹3.21 lakh | ₹4.29 lakh |
A plan built around ₹50,000 a month, twenty years out, is a plan built around ₹1.6 lakh a month. Every corpus figure follows from getting that step right.
Phase one: accumulation
The tool is a SIP, ideally with an annual step-up so the instalment rises with your income. The horizon is long, so the allocation is usually equity-oriented, reducing as retirement approaches.
Start early, however small
A ₹5,000 SIP started at 28 does more than a ₹12,000 SIP started at 40. The instalments you skip early are small; the compounding years you lose are the largest ones.
Step up annually
A 10% annual increase, matched to your increment, materially changes the corpus without changing your standard of living.
Count what you already have
EPF, PPF, NPS, existing funds and property income all reduce the corpus the SIP has to build. Counting them prevents over-saving as well as under-saving.
See why a rising SIP beats a flat one for the arithmetic behind the step-up.
Phase two: drawdown
At retirement the corpus stops receiving money and starts paying it out, usually through a Systematic Withdrawal Plan. The withdrawal rate — how much of the corpus you take each year — decides almost everything.
| Corpus | Monthly withdrawal | Annual rate | Corpus after 20 yrs |
|---|---|---|---|
| ₹1 crore | ₹40,000 | 4.8% | ₹3.35 crore |
| ₹1 crore | ₹60,000 | 7.2% | ₹1.72 crore |
| ₹1 crore | ₹80,000 | 9.6% | ₹9 lakh |
| ₹1 crore | ₹1,00,000 | 12.0% | Exhausted in year 15 |
All four rows assume the same 10% return. Only the withdrawal changes. This is why we spend more of a retirement conversation on the withdrawal figure than on scheme selection. How an SWP works explains the mechanics in full.
The first five years matter most
Two retirees with identical average returns over twenty years can end in very different places, purely because one met a poor market in year two and the other in year eighteen. The early retiree had to sell more units at lower prices, and those units never came back.
Two defences, both simple. Keep two to three years of planned withdrawals in low-volatility assets so a bad year does not force equity sales. And set the initial withdrawal rate conservatively, with the option to raise it later if the corpus has grown.
How we work on this
Establish the income requirement
In today’s money, split between essential and discretionary. The split matters, because the essential portion should be funded from more certain sources.
Size the corpus
Inflated to your retirement year, net of pension, EPF, NPS and rental income already in place.
Set the accumulation plan
SIP amount, step-up rate, and an allocation that reduces risk as the date approaches.
Design the drawdown
Withdrawal rate, which schemes it comes from, and the cash cushion for the early years.
Review annually
Against the plan, not against the market. Adjust the instalment or the target, not the assumed return.
What this service is, and is not
We are an AMFI registered mutual fund distributor, ARN 129145. We help you size the goal, structure the investments and review them each year. We do not provide tax or legal advice, we do not manage portfolios on a discretionary basis, and we do not promise returns. Every projection on this site assumes a constant rate of return; real markets do not provide one. Mutual fund investments are subject to market risks — read all scheme related documents carefully.
Common questions
How much corpus do I need to retire?
It follows from the monthly income you need, inflated to your retirement year, and the number of years the corpus must last. As a rough guide, a corpus of 25 to 30 times your first year of retirement expenses is a common starting point, then refined for pension, rental income and other sources.
At what age should retirement planning start?
Whenever you are reading this. The arithmetic strongly favours early years, but a plan started at 45 is still worth far more than one started at 55.
What if I already have EPF and PPF?
They form part of the corpus and should be counted. They are also largely debt instruments, so the equity portion of the plan usually has to do the inflation-beating work.
How is monthly income generated after retirement?
Most commonly through a Systematic Withdrawal Plan from the accumulated corpus, sometimes combined with interest from deposits and any pension. The mix depends on how much certainty you need each month.
What happens if markets fall just after I retire?
This is sequence risk, and it is the largest single threat to a withdrawal plan. It is managed by keeping two to three years of withdrawals in low-volatility assets, and by setting a conservative withdrawal rate at the start.
Do I need to move everything to debt at retirement?
Usually not. A retirement can last thirty years, and an all-debt portfolio is unlikely to keep pace with inflation over that period. A declining equity allocation, reviewed annually, is the more common approach.
Want your retirement number checked?
A 30-minute call, online or at the Surat office. No obligation, and nothing is executed on the call.