The single biggest mistake in retirement planning isn't under-saving — it's forgetting that today's expenses aren't tomorrow's expenses. If your household spends ₹50,000 a month today and you're 25 years from retiring, that same lifestyle will cost roughly ₹2.15 lakh a month by the time you retire, assuming a modest 6% average annual inflation. People who plan retirement using today's expense number, without adjusting for inflation, routinely end up with a corpus that looks large on paper but falls badly short in practice.
Working out the actual number you need
Using the ₹2.15 lakh future monthly expense above, annual expenses in your first year of retirement would be roughly ₹25.75 lakh. A common rule of thumb (a variant of the 4% withdrawal rule) suggests a corpus of about 25 times your annual expense to sustain withdrawals through a long retirement without running out — here, that's approximately ₹6.4 crore. This number can feel alarming the first time you calculate it, but the point of working it out early is that the earlier you know it, the smaller the monthly contribution needed to get there.
Why 10 years of delay costs far more than 10 years of contributions
To reach that same ₹6.4 crore target over 25 years at an assumed 12% annual return, you'd need to invest roughly ₹33,900 a month. Delay starting by just 10 years — leaving only 15 years to the same retirement date — and the required monthly SIP roughly quadruples (in this example, from about ₹33,900 to about ₹1.28 lakh a month), because there are far fewer years left for compounding to do the heavy lifting. This is the core argument for starting in your late 20s rather than your late 30s: it isn't that older starters can't retire comfortably, it's that they need to set aside a dramatically larger share of their income to make up for lost compounding time.
Don't forget healthcare and longevity
Two factors people routinely underestimate: healthcare costs tend to rise faster than general inflation as you age, and life expectancy has been steadily increasing, meaning your corpus may need to last 25-30 years post-retirement rather than 15-20. Building in a healthcare-specific buffer, separate from routine living expenses, and planning for a longer retirement horizon than feels intuitive are both worth factoring in rather than assuming your regular expense estimate covers everything.
Turning this into a monthly number
The math above is a simplified illustration — your actual number depends on your current expenses, expected inflation, retirement age, and return assumptions. Use the Goal SIP Calculator to map your own target corpus to a monthly SIP amount, and the Goal SIP with Inflation Calculator to factor in rising future expenses rather than planning around today's cost of living alone.
Where EPF and NPS fit into the picture
Most salaried employees already have EPF contributions building a base retirement corpus automatically, and many also contribute to NPS for the additional tax benefit under Section 80CCD(1B). These are worth counting toward your total retirement number rather than planning your SIP target as if starting from zero — a common error is calculating the full ₹6-crore-style target and then adding a large SIP on top, without subtracting the corpus your EPF and NPS are already on track to build by retirement. Getting an approximate EPF/NPS projection from your account statements first gives a more accurate sense of how much additional SIP investing is actually needed to close the gap.