How much money do I need for my retirement? This is undoubtedly the single-most important question you will need to consider while planning for your retirement.

This is incidentally also the single answer that will solve all your retirement-related money problems.

To arrive at this figure, you need to take into account a couple of things.

Do The Math

First, you will need to work out the math.

Let’s say you are 25 years old with a monthly expense of Rs 25,000. You plan to retire at age 60.

So, what will be your monthly expense at age 60? Taking inflation into account (6 per cent), your monthly expenses will come to about Rs 1.92 lakh per month or Rs 23.04 lakh. Multiply this by 20. That will come to Rs 4.60 crore. This will be the corpus you will require for your retirement taking your present expenses into account.

That’s certainly a big amount and can easily look overwhelming. But there’s a way out.

Early Mover Advantage

The key is to invest regularly over a long period of time across different instruments so that you can effortlessly accumulate the figure you want.

For instance, an amount of Rs 4,900 per month invested over 35 years at 15 per cent return will fetch you your desired corpus of Rs 4.60 crore at the time of your retirement at age 60.

If you start investing at age 35, then you will need to save about Rs 9,450 per month over the next 25 years to accumulate Rs 4.60 crore at 15 per cent return at the time of your retirement at age 60.

Delay further and the investment required per month will keep on rising.

If you start investing at the age of 45, then you will have only 15 years left to accumulate your corpus. You will need about Rs 23,600 per month to accumulate Rs 4.60 crore at the time of your retirement.

Discipline Is The Key

Do not get disheartened if you cannot start with the required investment amount to begin with. Start with whatever you can now and gradually increase your investment amount.

Chances are that your income will rise in future and you will also save more. Consequently, your living costs might also reduce. There could be other factors too, such as moving to your hometown or a smaller city after retirement where the living costs are likely to be lower.

As a practice, reduce your expenses and increase your savings. That way, you will have more amount to invest with, and accumulate your retirement corpus.