Do not be scared by what you need to accumulate for retirement!

Using a retirement calculator for the first time can be a nightmarish experience. Many users have complained that the low-stress retirement calculator is low-stress before using it and high-stress after!

I would like to think much of this stress is due to a lack of understanding of how a corpus grows over time.  Although investments in volatile asset classes do not compound like a fixed deposit, their growth can be represented as such. As long as we understand that the return assumed is the average considered over the period of investment, and not the one obtained each year, it should be okay.

Suppose my retirement is 25 years away and my target corpus is 15 Crore. This is not the number I should be scared of. For an average portfolio return of  10%, the monthly investment  I need to make is Rs. 46,148 in the first year and increasing at 10% each year.

If I can manage to invest this much - initially and also manage the increase of 10% a year, I see no reason to be scared or worried. If I cannot, then I will need to review the inputs. Remember, any calculator is only as good as its inputs.

This the standard compounding graph for the scenario mentioned. Notice how small the total investment is, compared to the corpus achieved. So much of the corpus is via the growth of the initial investments. 

Now for the key graph. This is the percentage of the target corpus (15 Cr) achieved vs the no of years invested.


Notice that it takes 20 out of 25 years (80%) to achieve 50% of the target corpus. The remaining 50% (7.5 Cr) comes in the next 5 years!!

So the key is to

  • start investing early
  • invest as much as possible
  • invest with a risk management strategy
  • invest without worrying about the target

If we invest with discipline and a plan, we will get there. Use  the low-stress retirement calculator without fear or stress.

Moral: Growth of a corpus is a non-linear process. It cannot be imagined. So do not try to and get stressed after using a retirement calculator!

Related post: How people react to a retirement planning calculation

Chennai DIY Investor Workshop Jan 29th, 2017

The fifth Chennai DIY investor workshop will be held on Jan 29th, 2017. Ashal Jauhari and I shall be the speakers. Read more and register for the event.

Book News

Our new book, You Can Be Rich Too With Goal-Based Investing is now available with a (total)discount of ~ 30% (Rs. 280) at Infibeam if you use the discount code BS10.

What Readers Say about You Can be Rich Too

You Can be Rich Too With Goal-Based Investing is my new book with Subra( published by CNBC TV 18.

Highly recommended

For anyone who wishes to take control of his/her finance this book is a must read. Very simply put, even an amateur in finance will be able to understand and implement. The author genuinely attempts to inculcate the habit of investing among the people who have the ability to invest but refrain from doing it, either due to lack of time , interest or understanding!. The message from the book is " Investment done without setting a goal/ objective is like leaving for a trip without knowing the destination, not everytime the end result will be promising. Hence, it's important to invest in a planned & disciplined manner." A read is highly recommended

Check out the other reviews and buy now via for Rs. 399 or Bookadda for Rs. 339/-. Or via Infibeam for just Rs. 280.

The book is also available on Kindle at (Rs. 244.30) or at ($3.36 or Rs. 244.30).

Also at,  Google Play Store (Rs. 244.30)

If you have read the book, please consider writing a review this weekend.

Register for the New Delhi DIY Investor meet:  April 23rd 2017

Get free, yet comprehensive calculators, tools and analysis delivered to your mailbox! Subscribe to get posts via email

Your subscription is successful if you are directed to the "Welcome Page"

Install Financial Freedom App! (Google Play Store)

Install Freefincal Retirement Planner App! (Google Play Store)


Buy our New Book!

You Can Be Rich With Goal-based Investing A book by  P V Subramanyam ( & M Pattabiraman. Read more about the book and pre-order now!
Practical advice + calculators for you to develop personalised investment solutions

About Freefincal

Freefincal has open-source, comprehensive Excel spreadsheets, tools, analysis and unbiased, conflict of interest-free commentary on different aspects of personal finance and investing. If you find the content useful, please consider supporting us by (1) sharing our articles and (2) disabling ad-blockers for our site if you are using one. We do not accept sponsored posts, links or guest posts request from content writers and agencies.

Blog Comment Policy

Your thoughts are vital to the health of this blog and are the driving force behind the analysis and calculators that you see here. We welcome criticism and differing opinions. I will do my very best to respond to all comments asap. Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete  the entire comment or remove the links before approving them.

10 thoughts on “Do not be scared by what you need to accumulate for retirement!

  1. Prasanna

    Timely article. Last weekend had a intense discussion with my uncle (54 years old) about his retirement needs and the there was literally panic, disappointment.

  2. Prasanna

    Timely article. Last weekend had a intense discussion with my uncle (54 years old) about his retirement needs and the there was literally panic and mixed feelings of sadness, disappointment. Have decided to start a SIP of Rs.10k before this Friday, in equity MF and increase it later in a month after more thorough data. Will be helping him with your calculators. Thanks.

    1. freefincal

      please do not invest any amount in equity that is necessary in the first 15 years of retirement.

  3. Ashutosh

    For retirement, Is it a good idea to invest in property and earn rental income. If you have already discussed this in a previous post do share that link.

  4. madascene

    If he has only 6 years till retirement, you might be doing him more harm than good by starting a SIP now. There is no guarantee how equity will perform over such a short term. Your uncle is already in a panic state and if market doesn't perform as expected, his heartbeat will go through the roof.

  5. Ashutosh

    If property investment is not desireable then, are Equity and Debt MF the only options for investment ? If that's the case then would Equity and Debt MF be sufficient to sustain through the remainder life period. I'm expecting to retire in another 19-20 years @ 60 years and continue to live through till 90 years.

  6. Prasanna

    Yes, The amount allocated to be invested in equity MF is done with this mindset: 20+ years; it is not going to be come back / donating it / gone (It is a bit extreme but anyways to simulate this mentality and it kinda :


Do let us know what you think about the article