- Date : 26/05/2020
- Read: 4 mins
- Read in हिंदी: अपने सेवानिवृत्ति कोष का अनुमान लगाने के 6 चरण
By following a meticulous method for retirement planning, you can arrive at an accurate estimate of your post-retirement financial needs.

Forecasting the exact amount of money one would need to lead a comfortable retired life may seem a tad difficult. However, with a bit of planning and method, you can arrive at an estimate of the ideal retirement corpus you will need. But first, what is retirement corpus?
A retirement corpus is the amount of money you and your spouse will need to take care of your living expenses after your regular stream of income has stopped. A retirement corpus estimates your present and future needs at the current lifestyle. This corpus needs to suffice for all expenses for at least 20-25 years ahead so that you are financially independent even in your sunset years.
Let’s look at six steps that tell you how is corpus fund calculated and clarify how much you need to save to achieve it.
1. Estimate your post-retirement expenses
To estimate your ideal retirement corpus, take a look at your monthly outgo. Many present-day expenses will still be a part of your lifestyle even after retirement, like groceries, utilities, rent, etc. There may be an escalation on expenses such as healthcare and insurance premiums. However, expenses related to children and lifestyle will eventually fall. With reduced income, your tax deducted at source is likely to fall as well.
Related: What is the right age to start planning your retirement?
2. Calculate your post-retirement income
Retirement doesn’t necessarily mean that your income flow stops completely. Many retired people continue to work in consulting roles, while some open their own business. Besides, your pension plans will also start to show yield after your retirement. All these incomes should meet your post-retirement expenses. What you really need to be concerned about is making up the deficit, if any.
3. Consider the future value of money
Estimating future expenses and incomes is the simple part; understanding their future value is trickier. The present estimate of your post-retirement expenses, incomes, and corpus may be known, but their value will not always remain the same. For example, you may have estimated that the ideal retirement corpus you will need is Rs 1 crore. Let’s assume your retirement age is 60 if you are employed or estimate a future date where you would want to stop working actively. The difference between the present age and the estimated retirement age is how to calculate the retirement date.
Say you will retire 20 years from now. During these 20 years, the economy will not remain the same and the purchasing power of your estimated corpus may reduce significantly. So, you will have to consider the inflation rate in the country and arrive at the figures accordingly.
4. Arrive at your retirement corpus
There should be no question of limiting your retirement corpus. The larger the corpus, the bigger will be your post-retirement yield. You can take the help of Tomorrowmakers Retirement Planning Calculator for a holistic and scientific approach towards finding your retirement needs. Our online retirement corpus calculator helps you arrive at the absolute minimum that you should aim for in order to lead a secured retired life. Ideally, your interest income from the retirement corpus should take care of your monthly financial needs after you retire.
5. Take stock of your savings
Next is how to find retirement corpus. During your years of active service, you will have invested in various financial instruments. If for nothing else, people invest in instruments like tax-free bonds for tax breaks. Investments made in real estate too can give your retirement plan a big leg-up. However, you have to keep an eye on the long-term capital gains tax rate while liquidating the assets and understand capital gains tax Indian rules.
Related: Five must-have investment instruments for retirement planning
6. Plan for additional requirements
Once you are done estimating your post-retirement expenses/incomes, the retirement corpus, and the savings made so far, you may realise that you still need to add a few more blocks to complete the building that would be your retirement corpus. To meet such apparent deficits, you must have robust savings and investment plan lined up. You may have covered most of the aspects related to your retirement, but this step will help you to close in on the final amount you will have on your retirement.
There are some rules of the thumb for retirement planning, such as the Rule of 25 (Rule of 25 means that you need to save 25 times your annual expenses (excluding salary) to have a comfortable retired life), but there cannot be a ‘one-size-fits-all’ solution to a calculation as uniquely personal as this. However, if you follow a systematic approach, you are more likely to end up with a fairly accurate assessment.
Take a look at why ignoring to plan for retirement can be financially damaging so that you can start planning proactively today!