How this pension calculator works
- Monthly need at retirement. Your monthly expenses today, grown by inflation each year until you retire.
- Pension pot needed. Monthly need × 12 ÷ annuity rate: the lump sum that buys that pension for life.
- Monthly investment. The amount to start with, raised by your chosen percentage every year, that grows to the pot at your expected return. Anything you've already saved is grown at the same return and counted first.
A worked example
Asha is 35 and spends ₹50,000 a month. She wants to retire at 60, in 25 years. At 5% inflation her monthly need at 60 is about ₹1.69 lakh. At a 7% annuity rate, the pension pot she needs is about ₹2.90 crore. Assuming a 10% yearly return, she can get there by starting with about ₹14,800 a month and raising it 5% every year.
Frequently asked questions
How much pension do I need after retirement?
Start with what your household spends today, leaving out loan EMIs and children's education that will have ended. Grow it by inflation until you retire: at 5% a year, ₹50,000 a month today becomes about ₹1.69 lakh a month in 25 years. That's the monthly pension to aim for.
How is the pension pot (retirement corpus) calculated?
Pension pot needed = monthly pension × 12 ÷ annuity rate. For ₹1.69 lakh a month and a 7% annuity rate, that's about ₹2.90 crore. The annuity rate is the yearly income an insurer pays for every ₹100 you use to buy a pension.
How much should I invest every month for retirement?
It depends on your pot, the years left and the return you expect. In the example above, someone aged 35 retiring at 60 would need to start with about ₹14,800 a month and raise it 5% every year, assuming a 10% yearly return.
What inflation rate should I use?
Many planners use 5% to 7% a year for household costs. Healthcare costs often rise faster, so if you expect high medical expenses, use a higher figure. Try a few values to see how sensitive your plan is.
Is this calculator only for NPS?
No. The pension you need and the pot required apply whatever you save in: NPS, EPF, PPF, mutual funds or a mix. To compare NPS fund managers on their past returns for your plan, use the CocoCompare planner.
This calculator gives estimates for planning only. It isn't investment, tax or insurance advice. Returns aren't guaranteed and past returns may not repeat.