Retiring in India: How Much Is Really Enough?

Planning for retirement is no longer something you do in your 50s. With rising inflation, longer life expectancy, and increasing healthcare costs, it's natural to wonder: how much do I need to retire in India?

Let’s explore what it really takes to retire comfortably and how to invest for retirement the smart way.

The Real Retirement Math in India

After retirement, you still need money every month to pay for food, medical bills, electricity, travel, and maybe even rent. If you need ₹50,000 to ₹1,00,000 every month, that means you will need ₹6–12 lakh a year.

Now, if you live for 25 years after retiring, that’s around ₹1.5–3 crore just to cover basic expenses. This doesn’t even include emergencies, rising prices, or extra comforts.

So, your retirement fund should be big enough to take care of all your needs, without any stress or worry.

The 80% rule is a good place to start: it suggests that you'll need about 80% of your pre-retirement income to maintain your lifestyle. But in practice, some costs go down (like commuting), while others (especially healthcare) go up.

PwC's latest research on the annual medical cost trend says that commercial health care spending growth will reach its highest level in 13 years.

Source: PWC

To personalize this estimate, you can use a retirement fund calculator. These tools help you project how much you’ll need based on your age, expected retirement age, monthly expenses, and expected return on investments.

If you're curious about how it all works behind the scenes, here’s the formula most calculators use:

Source: Mutual Funds Sahi Hai

This formula adjusts your future needs for inflation and helps you estimate how much money you’ll require throughout your retirement years.

With more people aiming to retire early, the question becomes even more critical. Why? Because their savings must last much longer and need to beat inflation consistently.

That’s why knowing how to invest for retirement is essential. You don’t just need a large corpus; you need one that grows and protects your future income.

Retirement Mutual Funds – A Simple Starting Point

One of the easiest ways to start is by investing in retirement mutual funds. These are special funds designed for long-term growth. They often follow a lifecycle approach, allocating investments to both stocks and bonds, gradually shifting towards lower-risk options as retirement approaches.

You can invest monthly through SIPs (Systematic Investment Plans), which is great if you want to build your retirement fund steadily without large lump sums.

Many solution-oriented mutual funds are also available. These are made specifically for retirement planning and come with a lock-in period of five years or till age 60, whichever is earlier. This lock-in helps you stay disciplined.

Source: AMFI

The returns from these funds vary, but they tend to perform better over long periods. You can compare them using tools like mutual fund performance trackers to choose one that fits your needs.

Also read: Risk, Reward & Time: The 3 Pillars of Smart Investing

The Power of NPS (National Pension System)

Another great option is the National Pension System (NPS). It’s a government-backed retirement plan that lets you invest in a mix of equity, corporate bonds, and government securities.

You can choose between auto or active modes. In auto mode, the system automatically adjusts your investment mix based on your age. In active mode, you decide how much to invest in equity or debt.

NPS is popular because of three key benefits:

• Low-cost structure

• Market-linked returns

• Extra tax benefits under Section 80CCD(1B)

  
  

When you retire, 60% of the NPS corpus is tax-free, and the remaining 40% is used to buy an annuity for monthly income.

Start Early. Stay Consistent. Adjust When needed.

The sooner you start, the easier it will be to attain your goal. Even small amounts invested regularly can grow into a large retirement fund thanks to compounding.

Check your plan every few years. Adjust your savings and investments based on changes in income, expenses, or life goals.

At PD Wealth, we help you build a customized retirement roadmap using mutual funds, NPS, and financial planning tools.

Visit pdwealth.in to start your journey toward a stress-free retirement.

FAQs

Q. 1 How to start retirement planning?

To start retirement planning, list your monthly expenses, set a target retirement age, estimate how much you’ll need, and start investing early. Use SIPs, NPS, or mutual funds. Review your plan regularly and increase savings as your income grows.

Q. 2 What is the 4% rule for retirement withdrawals?

The 4% rule says that you can comfortably take out 4% of your retirement assets each year without running out of money. It's an easy approach to figure out how much money you need to retire and make it last.

Q. 3 How to effectively diversify the retirement corpus?

To diversify your retirement corpus, invest in a mix of assets like equity mutual funds, debt funds, NPS, fixed deposits, and gold. This spreads risk and strikes a balance between growth and safety. Adjust the mix based on your age and risk level.