How much Money is Required to ‘Quit Working Forever’ in India?

It’s unlikely there’s ever a single answer to the question, “How much money is enough to never work again in India?” After all, isn’t the answer deeply personal, influenced by numerous binding factors? Can you afford to quit your job today?

Before you reach a decision, it’s worth reflecting on this quote:

“Retirement is not the end of the road; it’s the beginning of the open highway.”

The amount needed to retire comfortably varies based on several factors, including your current age, planned retirement age, monthly expenses, life expectancy, and inflation rates. Detailed scenarios in this guide provide estimates based on different retirement ages and expense levels.

What are the key elements that will guide you in determining your ideal retirement corpus? Let’s delve into these factors to help you make a more informed choice.

Table of Contents:

• Determining Your Retirement Corpus: Key Factors to Consider
• What’s the ideal amount of money to retire permanently in India?
• Key Factors to Consider
• Takeaway

Determining Your Retirement Corpus: Key Factors to Consider

There are six key factors that will guide you in determining just how much money you’ll truly need to retire comfortably.

1.How old are you now?

2.How old is your spouse?

3.What’s your ideal retirement age? Are you aiming to retire at 45, 50, or maybe 55?

4.How much do you currently spend per month? Will you need ₹25,000, ₹40,000, ₹75,000, or even ₹1.5 lakh after you retire?

5.What’s your estimated life expectancy—75 years, 85 years, or perhaps even 90 years?

6.How much should you set aside for emergencies?

Let’s break down each of these factors and explore them in detail.

But first, let’s start with a crucial baseline assumption: Have you already secured your finances for other major life expenses such as your children’s education, their weddings, or buying a house and car? And have you covered the basics like term insurance, health insurance, and personal accident insurance?

As the saying goes, “Preparation is the key to success.” With these essentials in place, we can move forward with our calculations confidently.

For the sake of calculation, let’s assume that both the husband and wife are the same age.

What’s the ideal amount of money to retire permanently in India?

Now, let’s determine how much money is needed to never work again in India, considering various age groups, lifestyle expenses, and life expectancies.

Scenario – 1

Retirement at Age 40

Current Age – 25 years

Retirement Age – 40 years

Retirement expenses in today`s cost- 30,000

Life Expectancy – 80 Years

Inflation – 6%

Return over inflation (after retirement) – 1%

Value of 30,000 after 15 years (at the time of your retirement) – 72,000

Minimum corpus required would be 2.85 Crores at the age of 40 to maintain the monthly expenses of 30,000 (inflation adjusted).

If we increase the expenses to 40,000, the corpus required would be 3.8 Crores.

So, if you intend to increase your expenses by 10,000 per month, you will need an additional corpus of 1 Crore.

Scenario – 2

Retirement at Age 45

Current Age – 30 years

Retirement Age – 45 years

Retirement expenses in today’s cost- 35,000

Life Expectancy – 85 years

Inflation – 6%

Return over inflation (after retirement) -1%

Value of 35,000 after 15 Years (at the time of your retirement) – 84,000

Minimum corpus required would be 3.30 Crores at the age of 40 to maintain the monthly expenses of 35,000 (inflation adjusted).

If we increase the expenses to 40,000, the corpus required would be 3.8 Crores.

So, if you intend to increase your expenses by 5,000 per month, you will need an additional corpus of 50 Lakhs.

Scenario – 3

Retirement at Age 50

Current Age – 30 years

Retirement Age – 50 years

Retirement expenses in today`s cost – 30,000

Life Expectancy – 85 years

Inflation – 6%

Return over inflation (after retirement) -1%

Value of 30,000 after 20 years (at the time of your retirement) – 96,000

Minimum corpus required would be 3.4 Crores at the age of 50 to maintain the monthly expenses of 30,000 (inflation adjusted).

If we increase the expenses to 50,000, the corpus required would be 5.7 Crores.

So, if you intend to increase your expenses by 20,000 per month, you will need an additional corpus of 2.3 Crores.

Scenario – 4

Retirement at Age 60 – How much money do you need to never work again?

So, let’s see how much money do you need to never work again at the age of 60

Current Age – 30 years

Retirement Age – 60 years

Retirement expenses in today`s cost – 30,000

Life Expectancy – 90 years

Inflation – 6%

Return over inflation (after retirement) -1%

Value of 30,000 after 30 years (at the time of your retirement) – 1,72,000

Minimum corpus required would be 5.4 Crores at the age of 60 to maintain the monthly expenses of 30,000 (inflation adjusted)

If we increase the expenses to 1,00,000, the corpus required would be 18 Crores.

So, if you intend to increase your expenses by 50,000 only, you will need an additional corpus of 12.6 Crores.

Key Factors to Consider

When planning your retirement corpus, it’s essential to account for the following factors:

1. Emergency Fund: To safeguard against unexpected situations, it’s prudent to have an additional ₹20–30 lakhs set aside as a safety net.
2. Spouse’s Age: If your spouse is 2-3 years younger, you’ll likely need a larger corpus to ensure financial security for both of you, especially if you anticipate living well into your 80s, 90s, or even beyond.
3. Longevity Planning: In case you outlive your expected lifespan, having an extra ₹20–30 lakhs invested in equity mutual funds can provide the necessary cushion to maintain your lifestyle in those later years.

Takeaway

Now that you understand how much money is required to retire comfortably in India, achieving the necessary corpus may be more manageable than you think. With a disciplined investment strategy, reaching your financial goals is entirely feasible.

Would you be surprised to learn that investing ₹15,000 monthly can grow into a corpus of ₹2.6 crores over 25 years with a 12% CAGR?

If you have specific needs based on your age, expenses, and other factors you can also refer to our recently published article How to Accurately Calculate Your Retirement Corpus in India: A Step-by-Step Guide.