Rs 1 crore is not enough: Financial expert explains why your retirement corpus may feel like just Rs 20 lakh in 20 years
pension savings
in the country is often under Rs 20 lakh. Now, new concerns are being raised about the future value of the widely assumed 'Rs 1 crore retirement goal.' Financial experts warn that by 2045, this amount may not be enough to cover basic expenses.
Rs 1 crore retirement goal under scanner
A recent LinkedIn post by Chennai-based audit expert B. Govinda Raju has brought attention to a gap in India's retirement planning. According to Raju, 'We don't plan for longevity or inflation,' which could leave retirees in a difficult financial situation.
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Many people assume that a Rs 1 crore corpus at retirement will ensure financial safety. But basic calculations tell a different story. If someone retires at 60 with Rs 1 crore and lives till 85, that gives them about Rs 33,000 a month for 25 years. However, due to inflation, this amount will reduce in value over time. Within 10 years, Rs 33,000 will feel more like Rs 17,500. By 2045, it may be worth less than Rs 16,000 a month.
Real value shrinks over time
Healthcare expenses, rent, family needs, and daily living costs are expected to rise steadily. The Rs 1 crore that once seemed sufficient may only be worth around Rs 23 lakh in real terms by 2045. That would not cover even basic monthly expenses in most urban areas.
Despite this, most Indians are not prepared. Data shows that only a quarter of the population takes active steps to plan for retirement. Many settle for pension plans that provide less than Rs 5,000 per month. The median
retirement corpus
remains below Rs 20 lakh, far from what is needed for even a modest post-retirement lifestyle.
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How much is enough?
Experts suggest that a realistic target for retirees living in metro cities should be around Rs 4–5 crore, especially if they expect monthly expenses of Rs 1 lakh or more in current value. Those living in smaller towns may still need a retirement corpus of at least Rs 2.5 crore to manage basic needs without financial stress.
The common causes of poor retirement planning include underestimating inflation, neglecting health-related expenses, low financial literacy, and depending too much on family or illiquid assets like real estate.
What can be done?
Financial planners recommend starting retirement savings early, increasing Systematic Investment Plan (SIP) amounts every year, and diversifying across equity and debt instruments. Planning separately for healthcare costs and building alternate income sources like rental income or dividends can also help.
The idea that Rs 1 crore is enough for a secure retirement no longer holds true. As inflation and healthcare costs rise, those who do not revise their plans may face severe financial strain. Without early action and better planning, future retirees could risk running out of money before they run out of time.
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