Most people plan for retirement by picking an age. A better starting point is a number: the corpus that can fund the life you want, for as long as you want it, without depending on anyone else.
Start from spending, not savings
Write down what your household spends in a normal month today, then remove the costs that end with retirement, such as EMIs and children's education, and add the ones that grow, most notably healthcare. That adjusted figure, inflated to your retirement year, is the real target.
Three assumptions decide everything
- Inflation: at 6% a year, expenses roughly double every twelve years. Plan for the number you will need then, not the one you spend now.
- Longevity: plan to at least age 90. Running out of money at 82 is a far worse outcome than leaving some behind.
- Withdrawal rate: drawing 4% or less of the corpus in the first year, rising with inflation, has historically been a sensible starting point in a balanced portfolio.
A quick way to sanity check the number
Take your expected first year of retirement spending and multiply by 25. If your household will need 12 lakh a year at retirement, the indicative corpus is about 3 crore in that year's money. It is a rough figure, not a plan, but it tells you immediately whether your current savings rate is in the right neighbourhood.
The part people forget
Retirement money is not one pot. The first five years of spending belongs in low volatility instruments so that a bad market never forces a sale, while the remainder stays invested for growth. That single structural decision does more for retirement security than any fund selection.
Retirement is not the end of earning. It is the beginning of your portfolio earning for you.
If you are within fifteen years of retirement, this is the right moment to put a number on it. Once the number exists, the monthly investment required stops being a guess.
Want this applied to your own goals?