Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment

Retirement Calculator: What will be your retirement age? What will be your monthly expenditure post retirement? What should be your retirement corpus? What should be the way to achieve that? These are primary questions that you can ask yourself when you are planning for retirement. 

Retirement age is a stage when your daily expenditures can be covered through your passive income.

Monthly expenditure can be gauged by current lifestyle.

Retirement corpus should be so much that it can help you bear your expenses for the rest of your life.

It can be achieved through investments, rental income, creating sources of income, etc.

The basic rule is that your retirement corpus in monetary terms should be so large that even if you get 5 per cent annualised returns on it, you can bear the expenditure for the rest of your life.

In this write-up, we project the retirement corpus for a 40-year-old person, whose monthly expenditure is Rs 50,000, has Rs 10 lakh current accumulated corpus.

Also know what should be the monthly SIP investment for such a person.

Calculation conditions

Other than the above-mentioned conditions, we are assuming that the retirement age for the 40-year-old person is 60 years, and life expectancy is 80 years.

They have no liabilities or requirement of money for child education or marriage at the retirement age.

The person will get 10 per cent annualised return on their retirement-related investment, and annualised growth on the retirement corpus post retirement will be 5 per cent.

The person's lifestyle will remain the same at 60.

Inflation will rise by 6 per cent. 

For such a person, the estimated retirement corpus required at 60 will be Rs 4,21,74,937.

The estimated yearly expenditure for such a person will be Rs 19,24,281 at 60.

They need Rs 45,889 monthly SIP investment to achieve that goal. 

With that monthly investment, the total money invested in 20 years will be Rs 1,10,13,419.

At 10 per cent annualised return, the expected amount on this investment will be Rs 3,11,61,518.

Retirement calculation formula 

FV = PV (1+r)n

Variable in the formula are- 

FV- Future Value

PV- Present Value

r- expected inflation

n- time left until retirement (retirement age-current age)

(Disclaimer: Our calculations are based on projections: This is not investment advice. Do your due diligence or consult an expert for retirement planning.)