How much should I invest to create a retirement corpus?

If my current monthly expenses are Rs 20,000, how much corpus will I need for my retirement? And how much should I invest monthly to create that corpus? Also, which funds should I invest? I am 23 years old and I want to retire at 60.
--Vivekh Lohani

You currently need Rs 2.40 lakh annually for your living expenses. If you retire at 60, you have 37 long years. At 6 per cent inflation, you will need Rs 20.73 lakh per annum post retirement to maintain the same standard of living.

To generate Rs 20.73 lakh every year, you need a corpus of Rs 4.15 crore when you turn 60. We are assuming that your life expectancy is 80 years. You will need more money if you live longer.


To accumulate the desired retirement corpus, assuming your investments generate an annual return of 12 per cent, you need to invest Rs 5,060 per month for 37 years.

Take a look at our recommended equity mutual fund SIP portfolios (Best mutual funds to invest in 2017). Choose a portfolio based on your risk profile and investment horizon.

Also read: How much should you invest to create your target corpus?