Worked ExampleHand-crafted
How much corpus does a 30-year-old need to retire at 60?
Scenario
Anand, 30, current annual expenses ₹8 lakh, target retirement age 60, assumed inflation 6%, assumed return 12%
Inputs
- Swr %
- 3.5
- Current age
- 30
- Inflation %
- 6
- Retirement age
- 60
- Assumed return %
- 12
- Years to retirement
- 30
- Annual expenses today INR
- 8,00,000
Calculation
- 1.
Annual expenses at 60 (inflation-adjusted, 30 yrs of 6%)
₹8L × (1.06)^30 → ₹45.90 L
- 2.
Corpus needed at 3.5% safe withdrawal rate
₹45.9L ÷ 0.035 → ₹13.12 Cr
- 3.
SIP-FV factor at 12% over 30 years
compound interest factor → 3,497x
- 4.
Monthly SIP required to reach ₹13.12 Cr in 30 years
₹13.12 Cr ÷ 3497 → ₹37,500
Conclusion
₹37,500/month SIP for 30 years (age 30 to 60) reaches a ₹13.12 crore retirement corpus at 12% assumed nominal returns.
Tradeoffs
Assumes 12% nominal equity return and 6% inflation hold over 30 years. A 10% return raises required SIP to ₹58,000/month. A 5L increase in target annual retirement expenses adds ₹1.4 crore to corpus.