Last Updated on April 26, 2026 by teamtfl
A client came to me in 2022 – 58 years old, senior VP at a pharma company, 32 years of service. He sat across the table and said something that stays with me: “My parents still live with us. My father is 84. I asked him last week if he needed anything and he said no. I wonder if I will be that lucky.”
Then he handed me a napkin with a number written on it. Rs.1.5 crore. “That’s what I think I need for retirement,” he said.
I pulled out my calculator. His current monthly household expense: Rs.1.5 lakh. Inflation at 6%. Life expectancy to 85. That Rs.1.5 crore would run out in under 7 years. He needed Rs.5.8 crore minimum – and closer to Rs.8 crore to retire with any margin.
He went quiet for a long time. “Why didn’t anyone tell me this earlier?”
Quick Answer
Most Indians underestimate their retirement corpus by 60 to 80%. The typical mistake: calculating corpus assuming a fixed return with no inflation adjustment. In reality, inflation erodes purchasing power, medical costs rise faster than general inflation, and most people live 20 to 30 years post-retirement. A 45-year-old spending Rs.1.5 lakh per month today may need Rs.8 to 12 crore to retire comfortably at 60.
The perception gap – what you think you need vs what you actually need
When I ask new clients “how much do you need for retirement?”, the answers cluster around Rs.1 to 2 crore. When I show them what that actually buys – adjusted for inflation, tax, and 25-year longevity – the mood in the room changes.
Pre-retirees are optimistic. Recent retirees are anxious. Those 5 to 10 years into retirement are the most worried. The older you get, the more you understand what the numbers mean when there is no salary coming in.
As Mark Twain said: “Plan for the future, because that’s where you are going to spend the rest of your life.”
Why the simple corpus calculation is dangerously wrong
The most common calculation I see: “I spend Rs.80,000 per month. At 8% return on corpus, I need 12.5x annual spend – Rs.1.2 crore.” Clean. Simple. Completely wrong.
Here is what it misses:
Inflation compounds silently. Rs.80,000 today is not Rs.80,000 at age 70. At 6% inflation over 10 years, that same lifestyle costs Rs.1.43 lakh per month. At 80, it costs Rs.2.57 lakh. Your corpus must grow faster than you withdraw – which becomes impossible unless you started with a much larger base.
Medical costs are a separate crisis. Healthcare inflation in India runs at 11 to 14% annually – nearly double general inflation. A hospitalisation costing Rs.5 lakh today will cost Rs.15 to 20 lakh in 15 years. Most people budget only for their current health insurance premium and assume that covers it. It does not.
Post-retirement returns are lower than you assume. Most people shift to “safe” FDs and debt funds as they age. An all-debt portfolio earns 6 to 7% gross. After tax at slab rate (all debt income post April 2023 is taxed at slab) and inflation, the real return is close to zero. The 8% assumption holds only if you stay partly in equity – which many retirees are uncomfortable doing.
You will live longer than you plan for. In urban, educated families with access to good healthcare, planning to age 85 to 90 is realistic. Plan for 25 to 30 years of retirement, not 15.
What the actual numbers look like in 2026
A realistic retirement corpus table for someone retiring at 60, planning 25 years of inflation-adjusted withdrawals at 6% inflation with a balanced portfolio at 9% post-tax:
| Current Monthly Expense | Corpus Needed (Retire Now) | Corpus Needed (Retire in 10 Yrs) |
|---|---|---|
| Rs.60,000/month | Rs.2.8 crore | Rs.5.0 crore |
| Rs.1 lakh/month | Rs.4.7 crore | Rs.8.4 crore |
| Rs.1.5 lakh/month | Rs.7.0 crore | Rs.12.6 crore |
| Rs.2 lakh/month | Rs.9.4 crore | Rs.16.8 crore |
Assumptions: 6% inflation, 9% portfolio return post-tax, 25 years post-retirement. Medical corpus not included – add Rs.1 to 2 crore separately. Treat as a floor, not a ceiling.
Find your current monthly expense and read across. The gap between what most people have accumulated and what they actually need is the retirement crisis hiding in plain sight.
The 5-step retirement readiness check
Step 1: Know your actual number. Use the table above as a starting point. Add Rs.1 to 2 crore for a dedicated medical corpus. This is your target.
Step 2: Know where you stand today. Total all investable assets – EPF, PPF, mutual funds, NPS, FDs, stocks. Exclude primary home and jewellery. This is your current corpus.
Step 3: Calculate the gap. Project your current corpus forward at realistic returns. At your current savings rate, will you reach the target by retirement? If not, the gap tells you exactly how much to increase monthly SIPs – or how many years to delay retirement.
Step 4: Check your insurance base. Adequate term cover (minimum 10x annual income), health cover (Rs.25 to 50 lakh family floater plus a super top-up), and critical illness cover if not already in place.
Step 5: Review annually. A retirement plan built in 2020 with 2020 assumptions may be significantly off by 2026. Salary, inflation, and tax rules have all changed. Review at minimum once a year.
Also read: How to Save for Retirement in India – The Complete Guide
Do you know your actual retirement number?
Most senior executives I meet have never calculated their corpus with inflation, medical costs, and longevity factored in. In a 30-minute clarity call, we build your number – and tell you honestly whether you are on track or how big the gap is.
Frequently asked questions
How much corpus do I need to retire in India in 2026?
A rough starting point: multiply your current monthly expense by 600 to 800 for a 25-year inflation-adjusted retirement. For someone spending Rs.1 lakh per month and retiring today, that means Rs.6 to 8 crore minimum – before adding a separate medical corpus. Add Rs.1 to 2 crore for healthcare costs. Most people underestimate by 50 to 80% because they ignore inflation compounding over 20-plus retirement years.
At what age should I start retirement planning in India?
The urgency genuinely intensifies at 40. Before 40, compounding does heavy lifting and modest SIPs build significant corpus. Between 40 and 50, there is still time to correct course but the monthly investment required increases sharply with every year of delay. After 50, the options narrow: increase savings dramatically, reduce retirement lifestyle expectations, or delay retirement. Starting at 35 vs 45 requires roughly 3x the monthly investment to reach the same corpus at 60.
What are the biggest retirement planning mistakes in India?
The five most common: (1) Ignoring inflation – calculating corpus at today’s expenses rather than future inflated costs. (2) Relying on EPF alone – it is a foundation, not a complete plan. (3) No separate medical corpus – healthcare inflation at 12% annually makes this mandatory. (4) Supporting adult children at the cost of retirement savings – the single biggest late-career threat. (5) Shifting entirely to FDs post-retirement – real returns after tax and inflation are close to zero, silently eroding purchasing power over 20-plus years.
What number do you have in mind for your retirement corpus? Does the table above change that number? Share in the comments.
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Hello Hemant Sir,
I am 35 years old and would like retire at the age of 60 years with minimum amount of 3 crore (after calculating considering 10% avg inflation p.a. and based on current lifestyle). Do you think it would be possible to accumulate that much amount and how much should be my savings per month?
Regards,
Harshavardhan
What do you think about pension plans? There are a lot of products in the market – from Aviva (Dhanvridhi), Metlife (Monthly Income plan), Birla etc.
If the objective is to build a corpus for your sunset years, then would it not make more sense in continuing to invest in equity and debt funds (basically a balanced portfolio using MFs) rather than go in for such pension plans? Aren’t the returns likely to be higher?
Hi Vatsa,
Read about Metlife Monthly Income – you will be shocked
https://www.retirewise.in/2009/11/ad-mad-mad-advertisementmetlife-monthly-income.html
Most of us Indians are poorly prepared for retirement, there is no argument on this point at all, nowadays the risk is not of dying early, the risk is of living long and a said by a friend of mine “after retirement everyday is a Sunday(holiday)”
All retirement calculations being done now are on assumed inflation of 6 or 8%, what happens if we have double digit inflation? If we use a retirement calculator and input all the details honestly the figures returned by the calculator are shocking to say the least. As far as the surveys which are mentioned above are concerned, if 74% of Indians were actually fully prepared for retirement by having Financial Plans in place, all CFP’s would go out of Business! Having an Insurance Policy or a Mediclaim cover is not Financial Planning. Having enough life and Medical cover along with a balance of regular and Increasing Investments in Equity , Fixed Income and Gold(In India the ladies of the house are doing that for us) is a very good way of taking care of your retirement needs.
Hi Deepak,
74% is an awesome figure – all major newspapers have shown this as highlight. Just they missed to write LOL 😉 in the end.
Hi Anil,
Any survey remains survey untill we understand the importance of objective. Yes I admit too that our parents are better financial manager than we poeople. Lets have the comparison. They may have or not the ancesstoral property but they kept on saving for the particular goal. They never withdrawn money from there savings untill required. They opened our rd at the time of our birth.
But we young people in any field be it Investing in equity, results in job or purchasing a car or buying any flat has only one goal i.e show of.
Hemant is quite right we need to prepare ourselves for future so that our presents run smoothly
Hi Anmol,
Showing off is the fool’s idea of glory.
People do too much of expenses to show other people – whom actually they don’t like. Human Behavior 🙁
Hi Hemant,
Good article but if you can elaborate more on factors to be considered while retirement planning. I am looking for the factors like how to assume the number of years me and my wife will be living after my retirement (my wife is also a dependent on me), I know it will be difficult to say that number but I would like to know whats the better way of getting closer to that number. Also, Inflation now a days is 8% to 10% so does it makes sense when people do Retirement planning assuming 6% or even less Inflation?
Hi,
Life expectancy will depend on many factors including your current age, where do you stay & health conditions.
Regarding inflation you can take general 7% & for medical/education 10% – it won’t make much difference if you work on only on inflation adjusted returns.
Hi Hemant
All these surveys are bogus and of no use.We know the reality is quite different.There is no point in giving any importance to such surveys.The sample size used in such surveys is very small and not representative.Economic status of our parents was much better even without investing in equity.They were wise enough to invest in PPF, Post Office Schemes , Bank Fixed Deposits, property and gold.Fortunately they were in professions where there is practically no retirement age.They had no life or medical insurance but still enjoyed long and healthy life.Yes we are living in the house of our parents.
Hi Anil,
You are right these surveys are done on very small sample – this particular survey was done with just 1000 people. In country like India where we have 600+ districts in India & 550+ MPs 😉 – 1000 is a small number to represent us.
I agree with you that our parents never invested in equity & still had great time but they were prudent enough to have very less or no loan – they lived conservatively throughout the working life & even after retirement. Our parents set some stands for savings & India is counted in one of the biggest savers but I think reverse counting has already been started.
But I don’t agree with your insurance point – ask those people who lost their parents in young age.
Hi Anil,
I partially agree with your views n partially disagree. Those days our parents never invested in equities because FD’s n other govt schemes used to give 10 % rate of interest and it was good enough to beat the inflation successfully. As a result healthwise they were more better than today’s generation because they know that their money is safe. But today its a different case. Its a corrupt govt. Inflation is at its peak and FD’s n other govt savings scheme have been reduced to 8 to 9 %. So people have no choice but to take a calculated risk of investing in equities which can beat inflation in longer run. But that risk also causes some tension as a result average life of a person is reduced to 60 which was 80 in earlier days because of the mental tension people have to go with. Hence they go for medical insurance and term plans as well.
Hi Manoj,
Life expactancy is actually increasing due to better medical facilities. (but expensive ;( )