Financial Freedom Calculator

The Financial Freedom Calculator runs a two-phase simulation: an accumulation phase where a step-up SIP (plus any starting corpus) compounds at an assumed return, and a withdrawal phase where an inflation-linked monthly income is drawn from the corpus while the remainder keeps earning. It reports the corpus at retirement, how many years the corpus lasts against the withdrawal goal, and the total amount withdrawn, in both nominal and today's rupees.

The two return inputs cover two different portfolios. While accumulating, money is typically in growth assets, so the calculator defaults to 12% p.a. After retirement, most investors move toward debt and hybrid holdings to reduce the risk of a crash hitting a corpus they are actively drawing from, so the withdrawal-phase default is a lower 8% p.a. Both are assumptions you can change, not forecasts.

"Corpus lasts" is the number of years a retirement corpus can sustain the chosen inflation-linked withdrawal before it hits zero. In this calculator, each month the corpus earns the assumed post-retirement return and pays out that month's income; the income itself rises with inflation every year. If the corpus outlives the full withdrawal horizon, the plan shows as covered along with the balance left over.

Nominal rupees are the actual figures on a future date; today's rupees restate them in current purchasing power by discounting at the inflation rate. At 6% inflation, a nominal ₹1 crore twenty years from now buys roughly what ₹31 lakh buys today. The calculator shows both because long-horizon nominal numbers look impressive while saying little about the lifestyle they will actually fund.

The 4% rule, from William Bengen's 1994 study of US market history, says a retiree withdrawing 4% of the corpus in year one, then inflation-adjusting that amount, would historically not have run out over 30 years. It was derived from US stock and bond returns and US inflation, so its number does not transfer directly to India. This calculator sidesteps the rule by simulating the drawdown itself under whatever return and inflation assumptions you choose.