“How much do I need to retire?” Most people either guess a round number, like ₹1 crore or ₹5 crore, or avoid the question entirely. Both can leave you short.
You don’t need a spreadsheet. You need four numbers, and about five minutes.
Step 1: Start with what you spend, not what you earn
Write down your monthly household expenses today: food, bills, rent or maintenance, transport, insurance, travel, help at home, and so on.
Then adjust for retirement:
- Remove costs that should end by then, like a home loan EMI or children’s school fees.
- Add or increase costs that tend to grow, like healthcare, travel and support for parents or children.
For our example, we’ll use ₹50,000 a month in today’s money.
Step 2: Adjust for inflation
Prices rise every year. At 6% inflation, ₹50,000 a month today could look like this when you retire:
This is the step most people skip, and it’s why round numbers like ₹1 crore are usually far too low.
Step 3: Work out the savings you’d need
Your savings need to pay those expenses every year of retirement, with the amount rising each year with inflation. Meanwhile, the money not yet spent stays invested and keeps earning.
Using these assumptions:
- retire at 60, plan for income until 85 (25 years),
- expenses rise 6% a year,
- savings earn 8% a year after retirement, in a balanced mix,
you’d need about 20 times your first year’s expenses at retirement.
For a 30-year-old spending ₹50,000 a month today:
You may have seen the “25 times” or “33 times” rules. They work the same way with different assumptions: a lower return, or a longer retirement, needs a bigger multiple. If you want extra safety, plan for 25 times or more.
Step 4: Work out the monthly SIP
Now the useful part: what do you need to invest every month? Assuming 12% a year until retirement, and starting from zero:
| Your age today | Savings needed at 60 | Monthly SIP needed |
|---|---|---|
| 25 | ₹9.30 crore | about ₹16,900 |
| 30 | ₹6.95 crore | about ₹22,500 |
| 35 | ₹5.19 crore | about ₹30,500 |
| 40 | ₹3.88 crore | about ₹42,200 |
| 45 | ₹2.90 crore | about ₹60,900 |
Two things stand out:
- The retirement number is smaller if you start later, because there’s less inflation between now and then. But the monthly SIP is much bigger, because there’s less time to build it.
- Waiting 15 years almost triples the monthly SIP, from ₹22,500 to ₹60,900.
If you already have retirement savings, like EPF, PPF, NPS or mutual funds, they reduce the SIP you need. Our retirement calculator includes them.
Ways to make the number manageable
- Step it up. Start with what you can afford and raise your SIP every year. A 10% yearly step-up can cut the starting SIP a lot. See how much to increase your SIP.
- Retire a little later. Each extra working year adds a year of saving and removes a year of spending.
- Plan healthcare separately. A good family health insurance cover protects your retirement savings from one large bill.
- Own your home by retirement, if you can. Rent is one of the biggest costs to fund for 25 years.
Turning savings into a monthly income
Reaching your number is half the plan. The other half is drawing a steady income without running out. Most people use a systematic withdrawal plan (SWP), which pays a fixed amount every month while the rest stays invested. A sensible starting rate is around 3 to 3.5% a year. We explain why in is the 4% rule safe in India?
You don’t have to wait until 60, either. Bridgit Second Income is built for people who want their savings to pay them sooner: build for about 10 years, then draw.
Your turn
Plug in your own age, expenses and savings in the retirement calculator. It takes about two minutes, and it’s the most useful two minutes you’ll spend on your finances this year.
