How Big a Retirement Corpus Do You Need?

Retirement planning in India has changed dramatically. With life expectancy now routinely crossing 80 and medical inflation running at 10–12% a year, the old thumb-rules no longer hold. Whether you are 35 and starting early, or 55 and doing a last-minute check, knowing your target corpus is the single most important calculation you can make.

Start with Your Monthly Expense Estimate

Write down your current household expenditure excluding EMIs you expect to be done with by retirement. A couple in a Tier-1 city typically spends ₹50,000–₹80,000 per month today. Add 6–8% annual inflation over the years until retirement to arrive at what that same lifestyle will cost on Day 1 of retirement.

The 25× Rule — and Its Indian Twist

International planners often quote the "25× rule": multiply annual expenses by 25 to find a corpus that can sustain a 4% annual withdrawal forever. In India, adjust this upward because inflation is higher and fixed-income returns are taxable. A safer multiplier for most Indian households is 30–33× annual post-retirement expenses.

Account for Healthcare Separately

Medical costs in retirement do not follow regular household inflation; they escalate faster. Set aside a separate health reserve of ₹15–25 lakh per person (on top of a comprehensive senior health policy) specifically for procedures not covered by insurance — dental, elective surgeries, long-term care.

Factor in Existing Pension Streams

If you have an NPS account, an EPF corpus, or a defined-benefit pension from a government job, each monthly payout reduces the corpus you need to accumulate independently. Subtract the present value of guaranteed streams from your total target before deciding how much more to invest.

The Role of Annuities in Your Corpus Plan

You do not need to draw down your entire corpus through a systematic withdrawal plan. Purchasing an immediate annuity with 30–40% of your corpus at retirement locks in a guaranteed monthly income for life, letting the remaining corpus stay invested and grow. This combination reduces the risk of outliving your money.

Revisit the Target Every Five Years

A corpus estimate made at 40 will be stale at 50. Life changes — children's education finishes, a property is sold, a business is wound up. Recalculate every five years and course-correct your SIPs, NPS contributions, or pension-plan premiums accordingly.

Conclusion

There is no single magic number; the right corpus is the one built around your lifestyle, family obligations, and health history. Compare annuity quotes, NPS projections, and pension products side by side, and speak with a retirement specialist on TruePolicy to build a plan that holds up through a long and healthy retirement.