# What is the corpus required for retirement in 2022?

Published: February 11, 2022 at 6:00 am

Last Updated on February 13, 2022 at 3:13 pm

A reader asks, “I will turn 50 this year and am considering retirement. How do I find out the corpus required for retirement in 2022? My annual expenses are about Rs. 6.5 lakhs ”

As mentioned in a recent article – I thought a pension was unnecessary but age taught me a retirement planning lesson! – there are several ways to estimate the retirement corpus required.

The first is what we would like to call a withdrawal rate estimate.

Suppose we expect a 50-year-old to live until age 90 (to be on the safe side), that is 40 years in retirement. We shall assume an inflation of 6% and an overall post-tax return from the corpus as 5% Then using this spreadsheet formula, we will get about Rs. 3.15 Crores.

Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!
🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥

=PV((1+5%)/(1+6%)-1,40,-650000,,1)

Why such a low rate of return? This is on the entire corpus and one cannot have too much equity after retirement. Even 40% is a bit high.  So it would be better to assume a return lower than inflation on the safe side.

Why is the corpus so low even though the real return is negative? This is because we are planning for immediate retirement. If this were a 30-year-old, the current expenses of Rs. 6.5 lakhs would inflate to almost 21 lakhs after 20 years (at age 50). Then the corpus required will be about Rs. 10 crores.

The above corpus will not change much if the return and inflation estimate changes but the real returns stay the same.

This is only a crude calculation. We can get a much better estimate and more importantly get clarity on how to invest the corpus using the freefincal robo advisory tool.

The retirement corpus is assumed to be invested in five buckets. Please note that the numbers provided below represent an example. The output of the robo tool depends on multiple inputs. So please do not extrapolate these numbers or percentages for your own situation without doing a full retirement planning calculation.

• An emergency bucket to handle unexpected expenses about 5%: Say Rs. 12 Lakhs
• An income bucket provides guaranteed income for the first 15 years in retirement.  About 47% of the remaining corpus or Rs. 104 lakhs is invested here. There is no equity exposure in this bucket.
• During this time (first 15 years), investments are made in three buckets: a low-risk bucket, a medium-risk bucket and a high-risk bucket.
• The buckets will be actively managed to reduced risk: rebalancing and also profit booking from one bucket to another. To understand how this works, try this: The Retirement Bucket Strategy Simulator.
• After 15 years, the low-risk bucket will be turned into 100% debt and provide income for about 11 years. After that, the other buckets will also be progressively used.

Details of the other buckets are given below.

• Corpus from a low-Risk bucket that provides income from year 16 to year 26 in retirement. To provide this income, the low-risk bucket will have an asset allocation of 30% equity 70% debt during the investment period (years 1 to 15 of retirement). About 27% or Rs. 59 lakhs is invested here.
• Corpus from a medium risk bucket will provide income from years 27 to 34 in retirement. To provide this income, this bucket shall have an asset allocation of 50% equity and 50% debt during the investment period (year 1 to year 26). About 16% or Rs. 35 lakhs is invested here.
• Corpus from a high-risk bucket will provide income from year 35 to 42 in retirement. To provide this income, this bucket shall have an asset allocation of 70% equity and 30% debt during the investment period (year 1 to year 34).  About 9% or Rs. 19 lakhs is invested here.

The overall equity exposure is only 33% excluding the emergency bucket and therefore is reasonably safe. The inflation assumed is 6%, the expected post-tax return from equity is 9% and the expected post-tax return from fixed income is 5% (for bucket investments).

For the income bucket, we have assumed a fixed income return of 5% for the first 25 years and 4% for the last 15 years -all these numbers can be varied at will by the user in the settings page of the robo advisory tool.

The minimum total corpus required for a reasonably comfortable retirement in 2022 is about Rs. 2,30,00,000 (for a 50-year-old with an initial annual expense of Rs. 6.5 lakhs expected to live until age 90). We can round this off to Rs. 2.5 crores.

You may wonder where the current year features in this calculation. It makes its presence felt via our inflation and return expectations. We should repeat this calculation every year before and after retirement to ensure we are making the right underlying assumptions.

🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! More than 1,000 investors and advisors use this!
New Tool! => Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and
Podcast: Let's Get RICH With PATTU! Every single Indian CAN grow their wealth!  You can watch podcast episodes on the OfSpin Media Friends YouTube Channel. 🔥Now Watch Let's Get Rich With Pattu தமிழில் (in Tamil)! 🔥
• Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
• Have a question? Subscribe to our newsletter using the form below.
• Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.

Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!

(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via or Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “” an organisation promoting unbiased, commission-free investment advice.
Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free!  One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course!  Increase your income by getting people to pay for your skills! More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu Gets a Superpower!” is now available! Most investor problems can be traced to a lack of informed decision-making. We made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, what would it be if we had to groom one ability in our children that is key not only to money management and investing but to any aspect of life? My answer: Sound Decision Making. So, in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parents plan for it, as well as teaching him several key ideas of decision-making and money management, is the narrative. What readers say!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want This book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost!