Retirement planning often sounds easier than it really is. Scroll through social media, and you will find a flood of advice telling you that a few crores tucked away will see you through your sunset years. But according to Sarthak Ahuja, investment banker and Director at NIAMH Ventures, that idea might be dangerously off the mark.
In a detailed LinkedIn post that’s been making the rounds, Ahuja bluntly stated, “You will be shocked to know how much money you need to retire in India today.” Ahuja breaks down the numbers to present a reality check on retirement planning and how much one should expect to need during the golden years.
The Math You Can’t Ignore
Most people, Ahuja says, will depend on a mix of equities and fixed deposits when they retire. On a simple basis, equities might give returns of about 12–14 per cent a year, and debt investments like fixed deposits around 5–7 per cent. Averaging it out, your overall return might hover close to 10 per cent annually.
At first glance, 10 per cent sounds healthy. But that’s before the two big drains kick in: taxes and inflation.
Ahuja explains that, realistically, investment income in retirement will likely be taxed around 20 per cent. And while official inflation figures hover near 6 per cent, lifestyle inflation, especially in urban India, is often higher. When you strip away both tax and inflation, your actual real return shrinks dramatically to just 2 per cent a year.
That’s the number you have to plan your expenses around.
The Retirement Corpus You May Need
Let’s say you want a comfortable retirement, not a frugal one. Covering monthly living costs, medical expenses, domestic help, and some contingency funds could easily add up to Rs 1.5 lakh a month, or Rs 18 lakh a year. Add Rs 2 lakh more for emergencies and the total would jump to Rs 20 lakh a year - an amount you will need just to maintain a decent lifestyle.
Now, if your real return is only 2 per cent, you will need a retirement corpus that throws off Rs 20 lakh annually at that rate. And here’s the punchline:
You’ll need around Rs 10 crore invested smartly to pull it off.
And that's the minimum. If you want a buffer, room for unexpected expenses, lifestyle upgrades, or helping out family, you’d be much safer targeting around Rs 15 crore.
To make it simple, Ahuja offers a thumb rule:
Your retirement fund should be roughly 50 times your annual expenses. Meaning, if you:
Spend Rs 10 lakh a year? You’ll need Rs 5 crore.
Spend Rs 20 lakh a year? You’ll need Rs 10 crore.
Why Does It Matter Now More Than Ever?
There is a larger warning hidden in such kind of math. India’s population is aging fast wherein today the median Indian is just 28 years old, but by 2050 one in every five Indians will be over 60, according to government estimates.
As the elderly population doubles, the pressure on healthcare systems, social security, and family structures will only grow. Planning your retirement properly, which includes knowing the real numbers, not just optimistic guesses, could be the difference between dignity and dependency later in life.
It’s not just about saving. It’s about saving enough and starting early.
As Sarthak Ahuja’s analysis shows, retirement in India could be a lot more expensive than most people think.
