Early retirement

Secrets Revealed! How to Plan for your Early Retirement in India? An Ultimate Guide with Excel Calculator

Who wouldn’t want to retire early?

This could not be the first time you are reading about Early Retirement in India. Even if it is, I am sure it is not going to be the last time.

Is this a new case of fad coming from the west? Or is Early Retirement in India really possible?

Early Retirement for Indians?

Though exotic, we Indians are very open-minded to accept something that satisfies our notions of rationality, aren’t we?

The only problem is, more than 90% of the contents about early retirement on the internet are not meant for Indian style of personal finance.

In fact, even the existing few for “early retirement in India” are only success stories. They, at most, can only motivate you, what then?

Where will you begin?

Is There a Difference in Early Retirement?

Early retirement is a situation in which a person retires from work at an early age than the standard retirement age.

However, early retirement doesn’t mean that one has to stop working and live off the savings money. That is one big misconception about early retirement.

“If I don’t stop working, how is that a retirement?” is your question, isn’t it?

A planned early retirement is a phase of life in

which a person retires from working for money to pursue a purposeful life.

Retire Early from the Rat Race

The best part about early retirement in India is that you will still be a middle-aged person, not old. You can use this extended period of time to make a positive and constructive change to your personal and social life.

You can learn and improvise your skills in a profession that you wanted to pursue at a younger age; because you didn’t have the opportunity then.

Or you may want to become a globetrotter, or just spend more of your precious time with family.

Though you have taken a conscious choice to retire from the corporate rat race, you can continue your passion in your own space.

Before that, I recommend you to become self-sufficient even after retirement. Self-sufficiency can be achieved through a one-word plan: FIRE.

FIRE: Financial Independence and Retire Early

As you can see financial independence literally should come before early retirement. And you must do so.

Becoming financially independent takes the financial stress off your shoulders. It also means that, after retirement, you don’t have to compromise on your lifestyle or while also ticking all the things in your bucket list.

But, you can’t expect an extraordinary life goal without any real setbacks, can you?

5 Stealthy Setbacks of Early Retirement

Here are the antagonists to your early retirement plan in India and its progress. I’ll introduce them first before we could knock them out in the following steps.

i) Inflation:

Inflation is a sneaky enemy to long-term early retirement financial plans. Inflation in the year 2018 was a little shy of 4%; one cannot predict what will be its rate in 20 years because there is no ultimate authority that decides it.

ii) Old Age Healthcare:

When you retire, your employer-provided health insurance will also retire. Most of the people tend to forget it. Some people don’t even consider securing themselves for their old age healthcare expenses.

iii) Children Expenses:

You don’t want to settle for less when it comes to your children needs. Be it a college fund or the wedding expenses; never let these things to be your hurdle.

iv) Change in Lifestyle:

Though a far-fetched thought, you may have special lifetime goals, say visiting a foreign country once a year or becoming a regular charity donor. It would obviously cost an ample amount of money and you wouldn’t want to compromise. If you do compromise, you might regret the whole idea of retirement.

v) Uncertainty:

Change is inevitable and unpredictable. Some events such as losing a loved one or a Stock market crash are unpredictable. These could have an intense impact on you both emotionally and financially.


Retirement life
I hope the things above helped you understand the early retirement in India better. Now, let me help you make a plan for early retirement in Indian style of personal finance.

Becoming an early retiree is a two-stage process, namely,

    1. Plan Establishment Stage
    2. Plan Implementation Stage

Going with one brick at a time approach, we’ll see the plan establishment stage in detail first.

1. Plan Establishment Stage of Early Retirement

The plan establishment stage will be the foundation for your early retirement in India. This foundation requires four pillars to support the next stage of plan implementation. They are,

    i) Choosing The Retirement Age
    ii) Evaluation of Expenses
    iii) Retirement Expense Projection
    iv) Corpus Calculation

We will be seeing the techniques to use to establish a prominent early retirement plan down below.

i) Choosing The Early Retirement Age

The early retirement age is one simple yet vital part of the early retirement plan. You must choose your early retirement age based on factors that help in making a customised early retirement financial plan for your entire lifetime.

The factors include:

  • Your current monthly expense.
  • Your expected post-retirement monthly expense.
  • Annual and one-time expenses including real estate and children college expenses.
  • Amount needed to be saved based on corpus calculated.
  • Your aggregate monthly income.

These five factors highly influence the plan of early retirement in India, deciding how early you are able to retire without compromising on your post-retirement lifestyle. You will be seeing each one of these below with a calculator tool to make yourself an early retirement plan.

Along with these, I would also like to make you aware of two things beforehand.

Mental Preparation for Early Retirement:

Early retirement in India is still a distant idea to the majority. And you cannot expect everyone in your social sphere to accept or encourage it right away.

You could face criticism; some people might even make you question your own decision. If you find yourself in such scenarios, I recommend you to read this helpful post: “Financial Freedom: 7 Psychology Hack!”

Be solid as a rock in your decision to retire early with financial freedom, you will be good to go.

Team Preparation for Early Retirement:

Early retirement in India needs to be a team decision of you and your spouse. This is the team that is going to save; to spend a lifetime together in peace.

Hence, it is vital to discuss with your spouse about this goal and leave no stones unturned before coming up with a unanimous decision. Your financial planner, if you have one, could help you in this regard.

Your Demo Early Retirement Plan:

Let’s say you have chosen 45 as your early retirement age. Make sure it is not 40ish or late 40s but exactly 45 years of age.

ii) Evaluate Your Expenses

If you’re a person practising the art of budgeting already, Good!

You don’t?

Don’t worry. It is easy to catch up faster than you think. I’ll help you do that.

For an accurate evaluation of your expenses: try to know the precise monthly expense figures of the past two years; since it includes the annual recurring expenses and inconsistencies. Find the average expense incurred per month. To do this, you can use the following ideas.

Get Account Statements:

Get your bank account transactions statements including your credit card statements of the past two years. It will give you all the ways you have been spending your money.

Categorize the Expenses:

Categorize your expenses based on the nature of the expense. The categories may be such as follows.

  • Food & Groceries
  • Health & Fitness
  • Personal Care Expenses
  • Children Expenses
  • Transport Expenses
  • Monthly Bills & Rent
  • Education Expenses
  • Entertainment
  • Travel Expenses
  • Miscellaneous Expenses
  • Tax Payments

Once you categorize all the expenses with the available data from the bank and credit card statements, it will be easy to find your monthly expense with more accuracy.

This result is going to be the base for your expense projection, which we are going to see next.

Use this expense and savings percentage tracker cum calculator tool, by downloading the “My Early Retirement Calculator”.

iii) Project Post-Early Retirement Expense

Projecting the expense will give the amount of money you and your spouse will need every month after early retirement. This projection of monthly expense can be done for the rest of your lives.

It is a three-step process to project the post-retirement expense, which goes as,

Current Monthly Expense:

This is the monthly expense with all the savings and planning for the future. You can surely say, this is the minimum amount of money that you will need a month to manage your expenses.

Expected Post Retirement Expense:

It is the amount of money that you want to support your post-retirement lifestyle. The expected post-retirement monthly expense is often decided from the current expense and the retirement life you expect to live.


Yes, I am reiterating this point. The value of money is not going to stay the same till you reach your early retirement age or even after that. Thus, inflation must be considered while projecting for the future.

Projecting the post early retirement expense like this will help in the amount of money that you need to save now till your early retirement age of 40 years.

Your Demo Early Retirement Plan

Current Age 30
Early Retirement Age 45
Years To Retirement 15
Life Expectancy 85
Years in Retirement 40
Current Monthly Expense ₹ 40,000
Inflation at Early Retirement 8%
Inflation Adjusted-Expected Post-Retirement Monthly Expense ₹ 1,26,887
Inflation Adjusted-Expected Post-Retirement Corpus 5,50,00,000

iv) Calculate Corpus

Corpus is the grand total of all the expected post early retirement monthly income (from investments), the annual recurring expenses and the onetime expenses as such.

Use the “Expected Post Retirement Expense Calculator” spreadsheet in “My Early Retirement Calculator”. to calculate your post-retirement monthly income and the corpus. Or, simply you can use the retirement calculator shown below, to figure out how much you need to invest to attain your desired retirement corpus. With this, you have successfully completed the first stage of early retirement in India. Now, it’s time to focus on how to implement this plan of yours.

2. Early Retirement Plan Implementation Stage

Let’s be honest for a moment, the plan implementation stage is not going to be as easy or as quick as the plan establishment stage. But with the following techniques, it is not going to be difficult either.

i) The 50% Ritual for Early Retirement

The 50% ritual is the process of developing a habit of saving at least 50% of your income in SIPs. And you must do it even on the month you are planning to retire.

Saving 50% would really seem like an impossible task to anyone. But take the baby steps today, you can run like an athlete tomorrow.

I’m going to show you the effect of the 50% saving ritual with early retirement versus regular savings with a conventional retirement plan.

Meet Mr. Anbarasu, A software engineer in Chennai.

He earns, he saves, like everyone else. He also has a retirement plan just like everyone else.

Current Age 28 years
Retirement Age 60 years
Years Remaining/ Contribution Period 32 years
Monthly Income ₹ 2,00,000
Monthly Expense ₹ 1,60,000
Savings Percentage 20% of Income
SIP Contribution ₹ 40,000
Total Earnings 10,62,00,741

Well, it doesn’t look bad at all, only until you see the following plan.

Now let us assume Mr. Anbarasu has decided to use this guide to plan her early retirement.

His “Early Retirement Savings Plan” will sort of look like this.

Starting/Current Age 28 years
Retirement Age 45 years
Contribution Period 17 years
Monthly SIP Contribution ₹ 1,00,000
Monthly Contribution in % 50%
Assumed Return Rate 12%
Total Contribution Till Early Retirement 2,04,00,000
Total Return/ Corpus Accumulated at 60 Years of Age 35,96,11,398

17 years of savings returning more than the savings of 32 years, can you imagine?

Remember, it is better to SIP a good sum as soon as possible and let it compound than spoon feeding it till the end. Compounding will work its wonder on large numbers when left alone.

Here’s another bonus, he will be retiring from the stressful “profession” to pursue his passion on his own terms!

Usually, after actual retirement age, only the expected monthly income will be cashed out from the SIP while letting the remaining to compound. This will negate the effects of inflation over the years.

What do you think Mr. Anbarasu would do if he sees this plan?

What would you do?

ii) Increase Your Savings Rate

You can do this in two ways, one is by sealing the leak and the other is by opening the second tap.

Cut-Down Expenses:

Under this, your priority should be to paying off all your debts including loan repayments as early as possible, if you have any debts or loans. Debt traps are literally the dream killers, so you kill them before it does. Then you can focus on your actual monthly expenses.

Cutting down expenses is a simple task when you have an established process and the discipline to follow it. The process is to group your expense categories as fixed expenses and variable expenses.

    Fixed Expenses:

      These are the expenses that cannot be compromised or reduced. These include Education expenses, Child Care, Tax payments, etc.

    Variable Expenses:

      These are the expenses that can be managed effectively to reduce it. These include Electricity and Telephone Bills, Food & Groceries, Entertainment, Personal Care, Travel, etc.

You already have access to our expense and savings calculator. It will help you with budgeting and increase your savings rate each month. So you are already doing fine in this regard.

Generate A Passive Income:

Remember the stress-free passion cum profession we discussed under “The Transition towards Value”? You can take up this profession as a trial.

For example, You might have wanted to become a blogger or youtuber and influence the universe when you were young. But you could not, because there was no opportunity or other reasons like job security. Hopefully, you have the opportunity now.

You can learn and improvise your skills in any such profession that you desired to pursue when you were young. You can monetize this skill to increase your passive income.

After all, this is what you are going to do when you retire early. It’s double the benefit.

But as an early retiree in India, you might have specific questions that you want to be answered. Read the following common FAQs made for early retirement in India before giving your 100% effort and 50% savings.

FAQ1: What If We Want to Buy Our Dream Home?

Contribute to your SIPs for your dream home also. Retirees say not to buy a house at least until a few years before retirement; because our preferences and/or job location may change. Keep in mind, this house is where you are going to spend the rest of your life with your spouse.

Also, it is cheaper to rent a house than to buy one and pay the EMI forever.

Would you rather save for a new house or pay EMI for a house that is old by the time you own it?

FAQ2: What Will I Do after Retiring Early in India?

When you retire early, you will have enough time to take care of your mind and body. A healthy lifestyle can help you more than any medicine could invest your time towards health and fitness.

Meanwhile, you and your spouse can pursue any venture you wish until your actual retirement age of 60. Like said before, this can be something that gives you both joy and pays you the same time.

FAQ3: Can the Early Retirement Corpus Provide for Our Entire Lives?

The plan you have up there did not only focus on savings but also letting your savings grow. In this early retirement plan in India, all the worst case scenarios are counted to counteract with a professional touch.

However, I recommend you and your spouse to get a detailed medical history including family medical history of the past couple of generations. This will help for a reasonable estimation of your and your spouse’s life expectancy.

From these two numbers of life expectancies, choose the life expectancy of the youngest as your common life expectancy for your early retirement plan in India.

In addition to that, add a buffer of 10% or as much percentage you think is enough to your expected post early retirement expenses. It should provide the topmost layer of assurance to your early retirement plan in India.

Note: All these FAQs for early retirement in India are answered with a few assumptions to answer the question in detail. If you have any specific question like these, you can drop them in the comment box below


One common thought among the early retiree’s community is that they didn’t start soon enough. This stems from the fact that they did not think early retirement is only a matter of the action, not something out of our hands.

A thousand people read and become aware of early retirement in India, only a hundred make the decision. A hundred people make the decision, only a handful of them practice the discipline for it.

Did you find this post helpful? What is your strategy for early retirement in India?


4 thoughts on “Secrets Revealed! How to Plan for your Early Retirement in India? An Ultimate Guide with Excel Calculator”

Leave a Reply

Your email address will not be published. Required fields are marked *

nine + eighteen =