Retirement Planning: Is Rs 1 crore enough for your retirement? Know for how many years can you sustain with that amount

Achieving a Rs 1 crore corpus for retirement can be difficult for some people, but at the same time, it can be quite easy for some high earners in 10 years. To accumulate a retirement corpus, a SIP (systematic investment plan) can be a better idea. 

First of all, let's know how much you need to invest to achieve a Rs 1,00,00,000 corpus in 10 years.

As per the calculations, one needs to invest Rs 37,200 per month with an annual step-up of five per cent for 10 years to achieve a Rs 1 crore retirement corpus. The expected annualised return is 12 per cent.

Calculations: 
Invested amount: Rs 56,14,771
Period: 10 years
Estimated returns: Rs 44,05,593 (12%/annum)
Total amount: Rs 1,00,20,365

Now the question is whether Rs 1 crore is enough for retirement?
The answer is no, as average inflation per year is six per cent. 

Understand with an example of your expenses:

Let's assume your household needs Rs 50,000 per month today, and in 10 years, you will need around Rs 90,000 a month to maintain the same lifestyle.

What really happens:
If you have Rs 1 crore in hand at retirement and you are assuming this money to grow at eight per cent annually, you will be left with Rs 0 by the 11th year.

Let's imagine a second scenario, even if you reduce your expenses to Rs 30,000 a month, then also Rs 1 crore will last only for around 20 years.

Notably, we have not included any other emergency expenses like medical bills, medicines, children's needs, etc.

What you can do

To have a smooth retirement life in terms of finances, one should plan it smartly. Calculate your expenses and don't forget to count inflation, that way you will be able to have the same lifestyle you have today. 

Rs 1 crore corpus is not less, though, but it always depends on your expenses and, most importantly, inflation.

Building wealth is important during your service time. Then only you can plan a better retirement.

(Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning.)