Is Rs 1 crore enough for retirement? Know the real account, Business Hindi News

A retirement fund of Rs 1 crore sounds huge. But can it really be possible to leave your job and live a comfortable life if you accumulate Rs 1 crore? Probably not. Many factors like inflation, medical expenses, house rent and retirement age can reduce this amount. A new study has also revealed that now more people are believing that Rs 1 crore will not be enough for a comfortable retirement. So how many crores of funds are required and what could be your ‘magic number’?

Why is the target of Rs 1 crore falling short now?

In India, Rs 1 crore has long been considered a big and safe figure for retirement. But people’s thinking is changing now. According to a report, in 2026, only 70 percent of urban Indians believe that Rs 1 crore or less is enough for a comfortable retirement. A year ago this figure was 77 percent. This means that now more people are believing that Rs 1 crore may not be enough for retirement. Among families earning more than Rs 15 lakh annually, only 51 percent feel that Rs 1 crore is enough. Whereas in metro cities this figure is 63 percent.

How much money do you actually need?

There is no single answer to this. Your needs will depend on how much you will spend every month after retirement, at what age you will retire and whether you own your home or live on rent.

If the amount is withdrawn annually at the rate of 4 percent, then about Rs 33,000 per month can be obtained from Rs 1 crore. Even if you have your own house in a metro city, it can be difficult to live a life with limited expenses on this much money. Whereas from Rs 2 crore, about Rs 67,000 per month can be withdrawn and from Rs 5 crore, about Rs 1.65 lakh can be withdrawn per month.

Inflation can spoil the game

If today you think that Rs 1 crore is a huge amount, then think about its value after 15-20 years. Suppose inflation averages 6 percent annually. In such a situation, the purchasing power of today’s Rs 1 crore can be around Rs 31 lakh after 20 years. That means, if you can maintain the same lifestyle with Rs 1 crore today, you may need around Rs 3.2 crore to maintain the same lifestyle after 20 years.

Today’s expenses will decide your retirement fund

A better way to plan for retirement is to first look at how much your family spends each month today. Suppose your monthly expenditure today is Rs 75,000. If expenses increase at the rate of 6 percent annually, then around Rs 2.4 lakh per month may be required to maintain the same lifestyle after 20 years. If today your expenditure is Rs 1 lakh per month, then after 20 years the same expenditure can be more than Rs 3.2 lakh.

If you want to retire early, you need a bigger fund.

According to the report, nearly 7 out of 10 urban Indians want to leave work before the traditional retirement age of 58 if they were not worried about money. About half of these people want to become financially independent before the age of 50. But retiring early means your savings will have to last you for more years. Therefore, a person retiring at 45 or 50 years will need a larger corpus than someone retiring at 60 years.

Forgetting health expenses is the biggest mistake

While making a retirement plan, just calculating the daily expenses is not enough. Medical expenses can become a big burden with increasing age. 75 percent of people expect to stay healthy in retirement, but only 52 percent have health insurance. Therefore, it is important to have adequate health cover and a separate medical emergency fund along with the retirement fund.

So what’s your ‘magic number’?

For some, Rs 1 crore may be enough, while others may need Rs 3 crore, Rs 5 crore or even more. If you have your own house, do not have a loan and have regular income from pension or rent, then the need may be less. But if after retirement you have to pay rent, have financial responsibilities for children or family and have to leave the job in 50-55 years, then a larger corpus will be necessary.