Retirement planning in India often gets reduced to "just contribute to EPF and NPS" — but neither is typically sufficient alone, and few people actually calculate what their real target number should be.

Step 1: Estimate your retirement expenses — adjusted for inflation

Your expenses today aren't what you'll need at retirement. Even a moderate 6% annual inflation roughly doubles costs every 12 years — meaning if you're 30 now and retiring at 60, your expenses could be 4-6x today's rupee amount by the time you actually need them.

Step 2: Work out how long your money needs to last

With life expectancy rising, planning for 25-30 years of retirement (from say 60 to 85-90) is more realistic than the shorter horizons often assumed in older financial planning advice. Your corpus needs to support withdrawals for this entire period while continuing to earn some return along the way.

Run these numbers for your own situation with the Retirement Planner, which factors in inflation, your current age, and expected returns before and after retirement.

Where EPF fits in

If you're salaried, EPF is a mandatory, low-risk foundation — 12% of your basic salary plus a partial employer match, compounding at a government-set rate (8.25% for FY 2025-26). It's reliable but, on its own, usually insufficient to fully fund retirement for most people given rising costs.

Project your EPF corpus at retirement with the EPF Calculator.

Where NPS fits in

The National Pension System adds market-linked growth potential (through equity and debt allocation) on top of EPF, with the added benefit of an additional tax deduction under Section 80CCD(1B) beyond the standard 80C limit. At retirement, at least 40% must go into an annuity providing a monthly pension, with the remainder available as a lump sum.

Estimate your NPS corpus and expected pension with the NPS Calculator.

Why EPF and NPS alone often aren't enough

Both are valuable, but relying solely on mandatory retirement contributions frequently falls short of what people actually need, especially for those wanting a comfortable (not just subsistence-level) retirement, or those who want to retire earlier than the standard age. Personal investments — PPF, mutual fund SIPs, or other market investments — usually need to fill this gap.

A realistic starting routine

  1. Calculate your inflation-adjusted retirement corpus target using your real numbers, not a rule of thumb
  2. Add up what EPF and NPS alone are projected to provide
  3. Whatever gap remains, work out the additional monthly SIP needed to close it
  4. Revisit this calculation every few years as your income, goals, and market conditions change