This is the easiest way to calculate your retirement corpus (without the use of an excel sheet or a financial calculator). You just need to open calculator on your Mobile to try this out. Before we start, please make a note of 4 important things that we need to make this work –

1. Your monthly expenses (e.g. Rs. 50,000)

2. Your current age (e.g. 36 years)

3. Your retirement age (e.g. 60 years)

4. Your life expectancy (e.g. 85 years) (approx. age that you believe you will die – consider 85 as the minimum age for calculations)

### Let’s begin the simple math –

Difference between your retirement age and current age – 24 Years (60-36)

Please note that your expenses will get doubled every 12 years if the inflation rate is at 6%.

Your current monthly expenses of Rs. 50,000 will be quadrupled (4 times) after 24 years which would amount to Rs. 2 lakhs per month (aggregate monthly expenses required at the time of retirement)

The next step would be to calculate the difference between your life expectancy and retirement age – 85-60= 25 years

Now, multiply these 2 lakhs monthly expenses for the next 25 years

2 lakhs per month *12 = 24 lakhs per year

24 lakhs per year for 25 years – 600 lakhs or 6 crores

(assuming 6% inflation and 6% returns – 0% returns over inflation after retirement)

This would be your retirement corpus and this is as easy you can think of.

(If your spouse is younger than you, multiply the per annum expenses with age difference between two of you and add to the above corpus)

### However, what if your assumed returns are more than inflation after retirement?

You will need to multiply the above corpus (6 crores) by

1. 0.9 if your returns are 1% more than inflation i.e. the inflation is at 6%, but the returns are at 7% (6 crores *0.9 = 5.40 crores)

2. 0.8 if the returns are 2% more than inflation i.e. inflation is at 6%, but the returns are at 8% (6 crores *0.8 = 4.80 crores)

3. 0.7 if the returns are 3% more than inflation i.e. inflation is at 6% and returns are at 9% (6 crores *0.7 = 4.20 crores)

My suggestion – Do not take more than 1% returns above inflation (to be on the safer side of calculation)

What happens in case the difference between your retirement age and your current age is not divisible by 12?

The simple solution would be to use fractions. Example – If my current age is 38 years and my monthly expenses are 50,000 – my expenses will get doubled by the age of 50 i.e. it will stand at 1 lakh per month. Now multiply this 1 lakh by 10 (difference between age 60 – 50) and divide it by 12. ((100000*10)/12 = 1,83,333). As such, 1.83 lakhs would be your average monthly expenses at the time of retirement.

### What if I want to consider a different rate of inflation?

Use the formula of 72. Divide 72 with your proposed inflation rate and that would be the number of years when your monthly expenses get doubled.

When we considered the inflation rate at 6%, our monthly expenses were getting doubled in 12 years.

If we take inflation rate at 4%, the monthly expenses will get doubled in 18 years.

If you want to validate whether the amount is right or wrong, try this with the calculator that you trust.

I have not taken any taxes into consideration since it would make this calculation far more complicated.

Also, various insurance premiums such as health insurance and car insurance have been not taken into account, since that is something you can easily calculate.

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