Why most retirement plans under-estimate the corpus
RBI's medium-term inflation target is 4% (with a ±2% band), but personal inflation runs higher — healthcare CPI compounds at 7–9%, education at 8–10%, and household help wages rise faster than headline CPI. Most calculators default to 6% inflation, which is reasonable, but underweights healthcare costs for a 25-year retirement.
PFRDA data on NPS subscribers shows that median voluntary contributions are far below the level needed to fund the median Indian's retirement lifestyle. The structural gap is real — bridging it almost always requires an equity-mutual-fund leg in addition to NPS/EPF.
The three-leg retirement stool
A robust Indian retirement plan typically runs three legs: NPS (long lock-in, tax-efficient, mandatory 40% annuity at maturity per PFRDA rules), EPF/PPF (debt-heavy, government-backed), and equity mutual funds (the growth engine, liquid, flexible). Relying on any single leg leaves you exposed — NPS limits flexibility, EPF/PPF cannot beat real inflation by much, equity alone has sequence-of-returns risk.
A planner's default split is roughly 30% NPS + 20% EPF/PPF + 50% mutual funds for a salaried investor in their 30s. The mix shifts more conservative as retirement nears.
Sequence-of-returns risk and the glide path
A poor sequence of returns in the first 5–7 years of retirement can permanently impair a corpus, even if the long-run average return matches your plan. The defence is a glide path: shift the portfolio from 80/20 equity-debt at age 35 to 40/60 by age 60, then 30/70 by age 70.
Maintain 2 years of expenses in liquid/short-debt at all times after retirement — this lets you skip selling equity in a drawdown year. This 'bucket strategy' is one of the most robust patterns we recommend.
Early retirement (FIRE) variant
FIRE — Financial Independence, Retire Early — has gained ground in urban Indian metros. The math is harsher: a 45-year retirement age with a life expectancy of 85 means 40 years of withdrawals, doubling the corpus requirement versus a standard age-60 plan.
FIRE plans need either a high savings rate (50%+ of post-tax income) or a long earning horizon with aggressive equity tilts early. The trade-offs around healthcare in retirement (no employer cover), inflation, and sequence-of-returns risk are sharper for FIRE — and warrant a one-on-one conversation, not just a calculator.
What this calculator assumes
The calculator inflates current expenses, computes a present value of the retirement annuity using a real (inflation-adjusted) discount rate, and back-solves the SIP. It does not model: separate healthcare inflation, partial pension inflows, real-estate income, longevity beyond your life expectancy entry, or sequence-of-returns risk. For a stress-tested plan request a callback — our advisor will run multiple inflation and return paths.