How Much Money Do You Need to Retire in India?
“If I am 30 years old and my monthly expenses are ₹2 lakh, what should my retirement corpus be if I plan to retire at 60?”
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Ajay Kumar thought for a moment and then dropped a bomb: ₹40 crore.
Ajay thought she had heard him wrong. To be clear, they explicitly excluded a house, cars, and other fixed assets from this number—meaning you need ₹40 crore in pure liquid assets. Naturally, this clip went viral, and there has been no dearth of comments across the country. People are looking at this thinking, “Is this just a South Bombay perspective? What is happening in this country? Do they even know how big a number ₹40 crore is?”
However, Sandeep Jethwani is not just a random content creator. He has been in wealth management for over 17 years, most of it with IIFL Wealth, a highly reputable organization in the industry. He also co-founded Dezerv, a SEBI-registered portfolio management company that currently manages over ₹16,000 crores in assets. Furthermore, he sits on SEBI working groups and is widely conceded to be an authority on wealth management in India.
So, if he quoted ₹40 crore, he wasn’t speaking out of emotion. He was speaking based on math.
I decided to open up an Excel sheet to find out how close or far he was from the actual math. If this math is true, we might as well all leave our jobs and sail to the Himalayas, because where on earth is an ordinary person going to find ₹40 crore in their lifetime? If it’s not true, what is the realistic number? Is an SIP still the right financial tool? Can wealth truly be built in this country so that you don’t have to depend on your kids for retirement?
Breaking Down the Math: Why 9% Inflation?
To figure out how Sandeep arrived at the ₹40 crore figure, let’s look at the variables. For a current monthly expense of ₹2 lakh, he assumed an inflation rate of 9%.
Why 9% and not the 6% officially announced by the government? The government’s 6% CPI (Consumer Price Index) is a standard benchmark, but it is far removed from real urban life. The official basket assigns a lower weight to healthcare and education, and a very high weight to food grains.
In our modern urban lives:
- We don’t spend the bulk of our income on basic food grains; we spend it on dining out, traveling, and lifestyle experiences.
- Healthcare inflation is growing at about 12% to 14% every year, doubling every 5 to 6 years.
- Private education costs are skyrocketing blindly. Even for government seats, acceptance rates are falling as the population competing for those slots increases.
If you review your actual spending on Amazon or Blinkit compared to last year, you will see that urban lifestyle inflation is easily around 9% to 10%, if not higher. Therefore, Sandeep’s assumption of 9% inflation over a 20-to-30-year horizon is completely justifiable.
If your current monthly cost is ₹2 lakh, compounding it at 9% inflation over 20 years means that by the time you reach age 60, your monthly expense will be ₹11 lakh per month. That translates to roughly ₹1.34 crore per year just to maintain your current lifestyle. If you multiply that by an urban life expectancy of 90 years (meaning 30 years in retirement), the raw math brings you close to a ₹40 crore requirement.
Planning Retirement via Excel: The 3 Core Pillars
When you do actual retirement planning in an Excel sheet, you must keep three critical factors in mind:
- Asset Allocation: You cannot put all your money into Fixed Deposits (FDs), nor can you put 100% of it into the Nifty 50, mid-caps, or small-caps. You need a strategic mixture.
- Taxes: The tax structures of today will likely look very different in the future, and capital gains must be accounted for.
- Post-Retirement Growth: When you retire, you don’t liquidate your entire corpus into a zero-interest savings account. You only withdraw what you need for the year (e.g., ₹1.34 crore), while the remaining capital stays invested and continues to generate returns. This rate arbitrage helps your corpus last longer.
Scenario 1: Starting Early at Age 25
Let’s test this in a model scenario for a younger individual:
- Current Age: 25 years old
- Retirement Age: 60 years old (35 years of working life)
- Life Expectancy: 85 years old
- Current Savings: ₹0
- Starting Monthly SIP: ₹10,000 (increasing by 5% every year to step up the investment)
- Target Lifestyle: Equivalent to ₹1 lakh/month in today’s value.
Long-Term Asset Allocation & Estimated Returns (Post-Tax)
| Asset Class | Allocation % | Expected Return | Assumed Future Tax Rate |
| Fixed Income (FD/PPF/Gold) | 10% | 7% | 30% |
| Large-Cap Mutual Funds | 40% | 12% | 20% (assuming long-term capital gains rise from 12.5%) |
| Mid-Cap Mutual Funds | 30% | 15% | 20% |
| Small-Cap Mutual Funds | 20% | 18% | 20% |
The Post-Retirement Shift
Once you hit age 60, your investment approach must become conservative. Let’s assume a post-retirement split of 50% in Fixed Income and 50% in Large-Cap Equity. We will also model this using a more conservative long-term inflation rate of 6%, assuming that as an economy matures and technology advances, long-term inflation historically cools down.
The Result:
- By age 60, your accumulated capital will be approximately ₹11.33 crore.
- However, due to 6% inflation, your required lifestyle cost of ₹1 lakh today will have grown to roughly ₹9.2 lakh per month (or over ₹1.1 crore for the first year of retirement).
- If you withdraw this inflation-adjusted amount every year while keeping the rest invested, you will completely run out of money by age 77.
How do we fix this shortfall?
- Option A (Increase SIP): If you raise your starting SIP from ₹10,000 to ₹12,500 a month (with the same 5% annual step-up), your corpus will safely last until age 85.
- Option B (Manage Lifestyle Inflation): If you keep the SIP at ₹10,000 but adjust your retirement lifestyle target down to ₹75,000/month (in today’s value), your money will never run out. In fact, by age 85, you would still have around ₹3 crore left.
Scenario 2: Testing Sandeep’s Math (Starting at Age 40)
Now let’s plug Sandeep Jethwani’s exact parameters into the sheet:
- Current Age: 40 years old
- Retirement Age: 60 years old (only 20 years to save)
- Life Expectancy: 90 years old
- Current Expenses: ₹2 lakh/month
- Inflation Rate: 9%
If you are 40 years old and starting from scratch with a ₹10,000 a month SIP, you will retire at 60 with roughly ₹7 crores. However, because your inflation-adjusted lifestyle will demand massive payouts, your money will completely run out within 5 years (by age 65). Even if you scale your SIP to ₹1 lakh a month, your money will run out by age 71.
To make your money last all the way to age 90 under these parameters, you would need to invest a staggering ₹5 lakh every month starting at age 40. This would allow you to retire with a corpus of around ₹35 to ₹40 crore, ensuring that your wealth sustains you comfortably until the end of your life.
So, is the math real? Yes. If you maintain a high urban lifestyle, start late at 40, and face 9% inflation, a corpus of ₹35 to ₹40 crore is a mechanical reality.
Wealth Strategies Based on Your Income Level
Note: You can download this exact retirement planning Excel sheet from the link in the description and pinned comment. Go to File > Download to save your own copy and play around with the numbers based on your age and expenses.
Depending on where you currently stand in life, your wealth strategy should adapt:
1. If Your Monthly Income is Less Than ₹50,000
If you earn under ₹50,000 a month, you cannot invest your way out of your current financial orbit. No matter how many personal finance videos you watch or how optimally you tag your SIPs, a small percentage of a low salary will not make you wealthy.
- The Strategy: Your primary focus should not be the investment market; it should be growing your active income. Use small SIPs (even ₹500 or ₹1,000) simply to build the discipline and habit of investing.
- How to Grow: Focus on upskilling in high-leverage sectors like AI and technology. Alternatively, look at entrepreneurship or building a side business. A job often has a hard ceiling or maximum salary cap, whereas a successful business owner has unlimited financial upside.
2. If Your Monthly Income is Between ₹50,000 and ₹1,00,000
At this income tier, you have the breathing room to build substantial momentum, but you must aggressively combat lifestyle inflation.
- The Strategy: When you get a 10% or 15% salary raise, do not immediately upgrade your phone, rent a more expensive apartment, or buy a premium car.
- The Golden Rule: The growth rate of your lifestyle spending should always be significantly lower than the growth rate of your income. As your income increases, keep your cost of living stable for as long as possible so that the surplus can be funneled directly into investments.
3. If Your Monthly Income is Above ₹1,00,000
When you cross this threshold, your focus shifts from absolute numbers to maintaining fixed asset allocation percentages.
- The Strategy: Do not focus on absolute targets like “I need to do a ₹1 lakh a month SIP.” Focus on percentages. Aim to lock in an investment rate of 25% to 30% of your total income. If you earn ₹4 lakh a month, a 25% investment rate naturally means a ₹1 lakh monthly SIP. As your career progresses and your income scales to 3x or 4x, maintain that same high percentage rather than letting your absolute expenses swell.
