How Much Money Do I Need to Save for Retirement? – A Guide

“How much money do I need to retire in India” – as we grow older, this thought appears in our mind every now and then. Retirement planning is the process that involves calculating the retirement corpus and building a strategy to achieve it. Estimating the retirement corpus accurately is important to ensure that you do not outlive your savings and save the appropriate amount. Your retirement corpus should help you meet your estimated inflation-adjusted expenses after retirement. Retirement corpus is the money you need to live a retired life without compromising on your standard of living.

Why Retirement Planning is Important?

Retirement planning is crucial for everyone, regardless of age or income level. Here’s why:

  • Financial Security: Retirement planning ensures that you have enough savings to maintain your desired lifestyle in retirement, covering essential expenses such as Food, housing, and healthcare.
  • Peace of Mind: Knowing that you have a solid retirement plan in place can bring peace of mind, allowing you to enjoy your retirement years without worrying about financial uncertainties.
  • Financial Independence: By planning for retirement early and building a robust financial foundation, you can maintain your independence and autonomy in retirement, making your own choices and living life on your terms.

How to Calculate the Retirement Corpus?

Now that you understand why retirement planning is important, let’s talk about the inputs required to calculate the retirement corpus.

  • Years to Retirement: Your retirement age will help you determine this. Typically, this is 60 for most. If you want to retire early, you can use a lower age to arrive at the years left till you retire. This number helps determine the number of years you have to save for retirement and the duration of your retirement years.
  • Post-Retirement Years: Consider how many years you want your retirement savings to last. This depends upon your life expectancy. With the advancement in medical science, most people live and remain healthy even after 80. So, you need to specify how many years after retirement you would want your corpus to support your lifestyle. Generally, women outlive men, hence, their life expectancy tends to be higher. For example, if you expect to live till 80 and your retirement age is 60, you will need to plan for 20 years of post-retirement life.


  • Current Monthly Expenses: Calculate your current monthly expenses that will persist in retirement. These estimations provide a baseline for estimating your post-retirement expenses. Anticipate changes in your standard of living after retirement. Consider expenses like housing costs, healthcare expenses, and travel plans to arrive at the final figure. Remember, your current monthly expenses may contain expenses that may not form a part of your expenses after retirement. These typically include expenses like EMIs, Life insurance premium, child’s expenses, etc. Discretionary expenses also tend to go down as you age.


  • Corpus Calculation: For calculating the corpus, you will also need the average inflation rate and average expected return on your investments. Inflation is required for estimating how your present expenses will grow (grow they will!) by the time you retire. Once you have the inflation rate you can calculate the future value of your expenses in each year of your post-retirement life. The retirement corpus is the amount that will help you meet the expenses in all retirement years considering inflation and an average rate of return on your corpus.

To use a retirement calculator, you can visit:

How to use the Dayco Retirement Calculator- A guide:

  • Existing Assets: Take stock of any existing savings, investments, or retirement vehicles you have. These will be Gratuity, PPF, NPS, EPF, etc. or any other assets that you have. Considering the expected value from these assets by the time you retire, you can compare that with the required corpus. This will help you estimate the shortfall and make changes where necessary.

Final Words

Planning for retirement involves more than just saving a certain amount of money; it’s about envisioning the life you want to lead and taking steps to make it a reality. In monetary terms, this means calculating how much you need to save to maintain your desired lifestyle in retirement. However, it’s equally important to plan for what you’ll do in your day-to-day life to enjoy the corpus you’ve built. Whether it’s pursuing hobbies, spending time with loved ones, or traveling, having a fulfilling retirement goes beyond financial security. By combining careful financial planning with a vision for your retirement lifestyle, you can create a retirement plan that brings you joy and fulfillment in your golden years.

~Nischay Avichal

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