Find the retirement corpus you need by your target age, and the monthly SIP required to reach it — starting from today's expenses, not a guess at a future number.
First, today's monthly expense is compounded forward by your expected inflation rate for every year until retirement, since a fixed rupee amount today won't buy the same in 30 years.
That inflated annual expense is then divided by your chosen withdrawal rate to get the total corpus required, the same divide-by-the-rate logic as the 4% rule, just applied to a properly inflation-adjusted number.
Your current savings are grown forward at your expected pre-retirement return, and subtracted from the required corpus to find the real gap you still need to save toward.
Finally, that gap is converted into a monthly SIP amount using the same future-value formula behind any SIP calculation.
Inflated expense: Today's monthly expense × (1 + inflation)^years
Required corpus: Annual expense at retirement ÷ withdrawal rate
Monthly SIP needed: Solved from the gap using the standard SIP future-value formula
A retirement corpus is the pool of money you need on the day you stop working, big enough that yearly withdrawals can pay for your life from then on. This calculator builds that target from your own numbers. It starts with what you spend each month now, inflates it to your retirement age, divides by a safe withdrawal rate, then subtracts what your existing savings will grow to and turns the remaining gap into a monthly SIP.
It is aimed at working people in their twenties to fifties who want a concrete target instead of a round number heard from a friend. A 35-year-old software tester in Chennai who spends ₹60,000 a month can see how large that becomes by 60 and what she must invest each month to get there. The calculator answers three linked questions: how much will I need, how much will I already have, and how much must I save from now on?
1. Find the years to retirement: n = retirement age − current age.
2. Inflate today's monthly expense: future expense = E × (1 + inflation ÷ 100)^n. Multiply by 12 for the yearly figure.
3. Divide the yearly expense at retirement by the withdrawal rate w: required corpus = yearly expense ÷ (w ÷ 100).
4. Grow your current savings S at the pre-retirement return R: S × (1 + R ÷ 100)^n.
5. Gap = required corpus − grown savings, or zero if savings already cover it.
6. Find the monthly SIP that fills the gap, with i = R ÷ 1200 and m = 12n: SIP = gap ÷ [((1 + i)^m − 1) ÷ i × (1 + i)].
Your retirement bills will be paid in the rupees of that future year. At 6% inflation, prices double roughly every twelve years, so ₹60,000 a month today becomes over ₹2.5 lakh a month in 25 years. Planning with today's figure would leave you with a corpus that looks large on paper but covers only a fraction of real costs. Compounding the expense forward by (1 + inflation)^n is the same maths as compound interest, applied to prices instead of savings.
If you plan to withdraw w percent of the corpus in the first year of retirement, then corpus × w ÷ 100 must equal your yearly expense. Rearranging gives corpus = yearly expense ÷ (w ÷ 100). A 4% rate means the corpus must be 25 times yearly spending, and 3.5% means about 28.6 times. The lower the rate, the larger the corpus, because you are asking the pool to last longer and survive bad market years with a smaller draw each year.
Money you have already set aside is not wasted in the calculation. It grows at your expected return until retirement, and only the remaining gap needs new savings. The SIP formula used is the future value of an annuity due, turned around to solve for the payment: if FV = SIP × ((1 + i)^m − 1) ÷ i × (1 + i), then SIP = FV ÷ that bracket. Current savings grow once a year at R, while the SIP compounds monthly, a small difference in convention that barely moves the answer.
Meera, 35, is a software tester in Chennai who spends ₹60,000 a month. She wants to retire at 60, assumes 6% inflation and 11% returns until then, plans on a 3.5% withdrawal rate, and already has ₹8,00,000 saved for retirement.
Answer: Corpus needed by retirement ₹8,82,89,912; Monthly SIP needed to get there ₹48,675; Monthly expense at retirement (inflated) ₹2,57,512
Entering today's expenses and forgetting that they will be inflated. The corpus figure is in future rupees, so it will look very large.
Including expenses that end before retirement, such as a home loan EMI or school fees, in the monthly expense.
Choosing a high pre-retirement return and a high withdrawal rate together, which stacks two optimistic assumptions.
Counting EPF or NPS balances as current savings and then also planning a separate SIP for the same goal without adjusting.
Setting a retirement SIP amount after a first job or a salary hike.
Checking whether early retirement at 45 or 50 is realistic.
Reviewing a retirement plan every few years as income and expenses change.
Explaining to a spouse why the retirement target is in crores rather than lakhs.
Why does a LOWER withdrawal rate need a BIGGER corpus? That seems backwards.
It feels backwards, but the math is consistent: your corpus isn't just sitting there, it's also earning returns every year. A smaller corpus produces smaller returns in rupee terms, so it can only sustain a slower drawdown rate, not a faster one, if you want the same annual expense covered. To drain a smaller percentage per year and still cover the same expenses, the pool of money itself has to be bigger, not smaller.
Where does the 4% figure come from?
It comes from the Trinity Study (1998), which tested historical US market data and found a 4% inflation-adjusted withdrawal rate had roughly a 95% chance of lasting 30 years across most historical starting points. It is a widely used starting reference, not a personal guarantee.
Does the 4% rule work the same way in India?
With a caveat: Indian inflation has historically run higher than US inflation, so an Indian retiree using a 4% withdrawal rate needs their post-retirement portfolio to earn roughly 9-10% nominal just to keep pace, which usually means staying meaningfully invested in equity even after retiring, not moving everything into fixed deposits.
What is sequence of returns risk?
It is the risk that markets fall sharply in your first few years of retirement, while you're still withdrawing at your planned rate from a now-smaller corpus. Even if markets later recover, an early bad sequence can permanently damage how long the corpus lasts, which is why some savers deliberately choose a lower, more conservative withdrawal rate than the historical 4% figure.
Should I plan for a 30-year retirement or longer?
The classic 4% figure was tested against 30-year retirement windows, roughly a 60-to-90 retirement. If you're planning an early retirement in your 40s that could last 40-50 years, a lower withdrawal rate closer to 3-3.5% is generally considered safer, since the corpus has to last considerably longer.