How much to save for retirement at every age in India

Start with a number, not an age

Most advice on "how much to save" is a percentage: save 15% of your income, save 20%. That is a reasonable habit, but it hides what you are actually buying, which is a monthly income for 25 to 30 years after you stop working. So the useful question is: what monthly expense will you need then, and what lump sum produces it?

Here is a simple way to size it. Take your monthly expenses today, grow them by inflation to the year you retire, multiply the annual figure by 25 (a rule of thumb that matches a 4% annual withdrawal), and that is a first-draft corpus. Our guide on how much retirement corpus you need walks through the logic, and the retirement calculator does the arithmetic for you. The 4% idea has limits in India, which the FIRE and the 4% rule guide covers.

What the number looks like

Assumptions for this illustration, which is not a forecast: monthly expenses of ₹50,000 today, inflation of 6% a year, retirement at 60, a corpus of 25 times annual expenses at that point, and a SIP earning 10% a year until 60.

• Expenses of ₹50,000 a month today become about ₹3.84 lakh a month at age 60 (35 years from age 25).
• The 25x corpus for someone who is 25 today is therefore about ₹11.5 crore.

That figure looks large because inflation compounds quietly. It is not ₹11.5 crore of today's money; in today's money it is about ₹1.5 crore. If your only measure is the nominal number, you will be frightened or complacent for the wrong reasons.

The cost of starting late

For that same ₹11.5 crore target at 60, here is the flat monthly SIP required, depending on the age you start:

Each five-year delay raises the monthly amount by roughly 65% to 80%, not by a fixed sum. That is compounding working against you. The SIP cost of delay calculator shows the same effect on a goal of your own, and the compound interest calculator lets you see how little of the final number is your own contribution when the horizon is long.

The table also says something encouraging: a start at 25 on ₹34,000 a month is a heavy ask on a young salary, so in practice you step the SIP up each year. A 10% annual step-up changes the starting figure dramatically; try it in the step-up SIP calculator.

Where you should be along the way

A target is only useful if you can check progress. On the 25-start path above, the balance on the way to ₹11.5 crore would look like this (same assumptions, flat SIP):

Notice how back-loaded it is. Nearly two-thirds of the final amount is added in the last decade. That is why people who read "you have only ₹26 lakh at 30" as failure are misreading the curve, and why people who stop at 45 because the balance "isn't moving" lose the most.

If you are behind this path, there are three levers, in order of power: raise the monthly amount (a step-up is the least painful way), push the retirement age back by two or three years, or trim the expense target. Retiring at 62 instead of 60 shortens the draw-down period and lengthens the saving period at the same time.

What counts, and what does not

Your retirement pot is not only mutual funds. Add together:

• EPF and VPF balances. These earn a declared rate; the EPFO declared 8.25% for FY 2025-26. The EPF calculator projects the balance, and EPF and EPS explained covers how the contributions are split.
• NPS. See NPS explained and the NPS calculator. Part of an NPS corpus must buy an annuity at exit.
• Mutual funds held for retirement. Keep these in a separate folio or mental account, so a house down payment does not eat into them.
• PPF and other small savings.

Do not count your home as retirement savings unless you plan to sell it, and do not count gold you intend to keep. Subtract what you hold today from the target, and only then compute the SIP for the gap.

Then match the mix to your age. A 30-year-old can hold most of the retirement pot in equity; a 55-year-old needs a growing cushion of debt. Our post on asset allocation by age sets out how to think about that, and the three-bucket retirement strategy covers the other end: how to draw income from the pot once you stop. If you are starting later than you wished, read starting retirement savings at 40.

A short checklist

1. Write down monthly expenses and the age you want to retire.
2. Compute a 25x corpus for that year, and then sense-check it in today's money.
3. Subtract EPF, NPS and other balances.
4. Set a SIP for the gap, with a yearly step-up.
5. Re-check once a year, ideally with the same net-worth snapshot you use for everything else (track your net worth every quarter).

The Employees' Provident Fund Organisation and the NPS Trust both publish the current rules for their schemes, and PFRDA regulates the pension system. Check them before you build a plan on a specific withdrawal or tax rule.

Common mistakes that wreck the plan

Three errors show up again and again. The first is stopping the SIP in a fall. The balance table above only works if contributions continue through bad years, and those years are when each rupee buys the most units; see should you stop your SIP in a market crash. The second is ignoring inflation in the target, which leaves people confident about a number that will not cover their costs. The third is mixing goals: a retirement fund that is also the emergency fund, the child's fee fund and the holiday fund is none of them. Keep the retirement money in its own folios, review once a year, and resist the urge to check daily.

This post is for education only and is not investment, tax or financial advice. Figures are illustrations under stated assumptions, not forecasts; returns, inflation and rules change. Verify current rules before acting.