Is ₹1 Crore Enough for Your Retirement?

Short answer: ₹1 crore lasts about 22 years if your household spends ₹5 lakh a year today (about ₹42,000 a month) and the money earns 1% a year more than inflation, for example about 7% against 6% inflation. At ₹3 lakh a year it lasts about 40 years; at ₹10 lakh a year, about 10. This is for illustration only, with the assumptions stated below, and is not a projection: whether ₹1 crore is enough depends on your expenses, inflation, returns and how long you live.

How long will ₹1 crore last in retirement?

Years ₹1 crore lasts, by yearly expenses in today's money (for illustration only, not a projection):

Assumptions: the money is withdrawn at the start of each year; each year's withdrawal rises with inflation; the corpus earns a fixed return above inflation every year (the "real return"), for example 7% a year against 6% inflation is a real return of about 1%. Amounts are before tax. Calculated by SahajMoney on 4 November 2026. The real return is an assumption, not a forecast for any investment.

Someone who retires at 60 and spends ₹5 lakh a year runs out of money at about 82 in this illustration. Planning on a small real return is the cautious choice; the extra years at 2% depend on returns nobody can promise.

Why is the retirement number hard to pin down?

That's quintessentially what most of us have been trying to get an answer for. Why is it so difficult to determine? Four moving pieces make it difficult to estimate: expenses, inflation, returns and longevity. Let's look at each of these one by one. Watch the video

How do your expenses change the number?

First, split the expenses you expect in retirement into mandatory and discretionary expenses. Estimating them separately gives a better idea of the corpus you need. Mandatory expenses are those the individual or family cannot avoid, whereas discretionary expenses are those that can be cut if the need arises. This part can be managed to an extent by controlling your own behaviour.

An "all I want is everything" attitude does not augur well for those with limited resources and a long life ahead in retirement, so prioritising expenses helps the retirement corpus last longer. Saving a portion of income regularly during the wealth accumulation phase of life builds the corpus that meets expenses during the wealth distribution phase.

The table above shows how much this matters: at a 1% real return, cutting yearly expenses from ₹7.5 lakh to ₹5 lakh makes ₹1 crore last about 22 years instead of 14 (for illustration only).

How does inflation change the number?

Second, inflation means that the value of money goes down over time. For example, if today one can buy 1 unit of an item for ₹100 and in 12 years the same item costs ₹200, then inflation during that period was about 6% a year.

For reference, the Government has kept the Reserve Bank of India's inflation target at 4% CPI inflation, with a band of 2% to 6%, for April 2026 to March 2031 (Department of Economic Affairs notification, 25 March 2026). This article uses 6%, the top of that band, as a cautious illustration. At 6% a year, ₹1 crore received 20 years from now buys what about ₹31 lakh buys today (for illustration only).

So inflation is a silent killer, and an individual or family should account for inflation in every goal, retirement or any other. Inflation control is better left to the government and the central bank, but an individual or family can control their consumption pattern to an extent, and can invest in assets that have a better chance of beating inflation over a period.

How do returns change the number?

Third, because the value of money goes down with time, one needs to save now in assets that, over time, earn a return above inflation. What counts for retirement is that gap, the real return, not the headline return. These assets can be productive or non-productive. Productive assets are those that can generate cash flow. These include equity, real estate (if it can earn rental income) and fixed income instruments.

On the contrary, non-productive assets are those that do not have the potential to generate cash flow. For example, commodities as an asset class cannot generate cash flow, and their return over a period depends on future supply and demand. So, one should invest in productive assets, which have a comparatively better chance of beating inflation during the holding period. Returns from any asset are not certain.

How long should the money last?

Finally, to put together the last piece of the puzzle, one needs to plug in the number of years for which the corpus should last, so that the individual or family can withdraw from it to meet expenses after retirement.

With the advancement of medical facilities, longevity has increased, which could mean that for someone retiring at 60 the corpus should last another 30 years or more. Living a long and fulfilling life is the best thing one could look forward to, and living it worried about whether the corpus is enough is not the way to go about it. Many couples plan for one of them living to 90 or beyond.

What can go wrong, and how much margin should you keep?

All said and done, expenses, inflation, returns and longevity are just estimates, so it is wise to allow for some or all of them going wrong; it is better to be roughly right than precisely wrong. Hence, plan for expenses, inflation and longevity to be higher, and returns to be lower, than first estimated: a margin of safety. As the protagonist said in the Hollywood movie '21', "In life, always account for variable change."

So, let's work out the corpus needed by someone retiring today who withdraws ₹12 lakh a year, rising with inflation, with an average return of 1% above inflation for the next 25 years: about ₹2.7 crore. If the yearly expenses are ₹15 lakh and the money must last 30 years at the same 1% real return, the corpus needed is about ₹3.9 crore. Both figures are for illustration only, under the assumptions stated above, and are not a projection.

As Carl Richards once said, "Risk is what's left when you think you've thought of everything." So, take estimates of the corpus required for retirement with a lot of salt.

How do you work out your own number?

1. Write down your yearly household expenses today, split into must-pay and can-cut.
2. Subtract income that will continue after you stop working, such as a pension or rent.
3. Decide how many years the money must last, for example to age 90.
4. Find the corpus at a cautious real return of 0% to 1%. At 1% over 30 years, it is about 26 times the yearly gap (for illustration only).
5. Add separate amounts for known large costs, such as health costs above your insurance or a major house repair.
6. Review the number every year, and after any big change in family or health.

For a shorter take with the same numbers, read Is ₹1 crore enough to retire in India? on LinkedIn.

If you want help with your own numbers, see retirement planning at SahajMoney.

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