Supporting everyone's personal finance journey

Goal-based investing will show you how much you should have saved at 30,40,50 and retirement

13 Sep 2021 - Contact Sayan Sircar
5 mins read

This post uses goal-based investing principles to keep investors on track for their retirement goals.

(click to open in a new tab)
Goal-based investing will show you how much you should have saved at 30,40,50 and retirement

Table of Contents


This post aims to provide a call to action in case you have not set your retirement goals and taken the necessary action.

As a follow-up to this post on the minimum investment needed for retirement, we will now calculate how much corpus you should have accumulated at different ages.

Our metric will be the corpus saved in mutual funds, provident funds (PF, PPF, VPF), NPS and other assets as a multiple of current monthly expenses. In addition, we will assume that the current lifestyle, post inflation adjustment, will continue in retirement. We will see how the age of the investor and current expenses impact the minimum corpus you need to have accumulated.

Assumptions for the model

There are multiple assumptions in a calculation like this. It would help if you kept in mind that the calculations shown below will be valid only as per the assumptions made below:

  • 7% inflation both before and after retirement
  • 40 years in retirement starting at 58
  • 5% increase in yearly investment until retirement
  • Risk profile is moderate (60:40 equity and debt allocation for goals > 15 years away: see this for details)
  • 11% and 3% as long term returns (post-tax) of equity and debt respectively

Minimum corpus table

The table shows the current expenses as a percentage of annual post-tax income in the columns. The rows show the current age of the investor.

For example, if you are 35 years old and spending 50% of your 20 lakhs annual income, you should have saved 13x of your yearly expenses as retirement corpus by now. So in this example, the retirement corpus you should have saved by now will be ₹1.3 crores (13 * 50% * 20).

(click to open in a new tab)
Goal-based investing sensitivities for minimum retirement corpus

Our new Goal-based investing tool will help you to create and manage all of your goals in one place. Click the image below to get access:

Arthgyaan creates a system for reaching your financial goals by sharing simple, actionable advice backed by research and analysis.

Your email address will not be shared with anyone and you can unsubscribe anytime.

What if the corpus figure is very high

In the assumptions above, we have assumed that you will maintain current lifestyle expenses in retirement. Any corpus figure in the tables that is very high indicates

  • current investments are too less
  • current expenses are too high

To remedy you need to do some introspection as to what needs to be done

  • reduce discretionary expenses like entertainment and travel
  • EMIs on household goods and paying too much for a car loan
  • high EMI on home loan

Suppose the lifestyle in retirement will be a lot less expensive than today, for example, by shifting to a low cost of living location. In that case, the target corpus will be a lot less.

The calculations in the table are not thumb rules. They are actual corpus figures for the current portfolio, expenses and income of the investor, including increasing the SIP amount every year. If you need a tailored result, please see

Yearly review process

(click to open in a new tab)
Goal-based investing: importance of portfolio review

This post also shows why it is crucial to review your progress towards your goal continuously. This yearly review process will require you to repeat the retirement? goal planning process to check if you are on track. In addition, you will need to alter the SIP amount based on the progress you have made. If you have not started investing yet, please do so immediately since the SIP amount goes up very quickly if you delay.

A note on having the prerequisites in place

At all times, ensure that you have the following in place

  • an emergency fund with 6-12 months of expenses
  • a sinking fund for insurance payments (health, car) and known recurring expenses (building maintenance, holiday travel etc.)
  • a term insurance policy as long as you have income
  • a health insurance policy (separate from the company provided one if any) for 10-15 lakhs as a base policy with a 50-100 lakhs super-top up
  • no high-interest debt like credit card or personal loans

Once you start investing,

If you liked this article, consider subscribing to new posts by email by filling the form below.

Previous and Next articles:

Latest articles:

Topics you will like:

Asset Allocation (18) Basics (5) Behaviour (10) Budgeting (9) Calculator (10) Children (6) Choosing Investments (24) FAQ (2) FIRE (8) Gold (6) House Purchase (10) Insurance (6) Life Stages (2) Loans (10) NPS (3) NRI (3) News (5) Portfolio Construction (27) Portfolio Review (17) Retirement (20) Review (7) Risk (6) Set Goals (24) Step by step (3) Tax (10)

Next steps:

1. Email me with any questions.

2. Use our goal-based investing template to prepare a financial plan for yourself
use this quick and fast online calculator to find out the SIP amount and asset allocation for your goals.

Don't forget to share this article on WhatsApp or Twitter or post this to Facebook.

Discuss this post with us via Facebook or get regular bite-sized updates on Twitter.

More posts...

Disclaimer: Content on this site is for educational purpose only and is not financial advice. Nothing on this site should be construed as an offer or recommendation to buy/sell any financial product or service. Please consult a registered investment advisor before making any investments.

This post titled Goal-based investing will show you how much you should have saved at 30,40,50 and retirement first appeared on 13 Sep 2021 at

We are currently at 161 posts and growing fast. Search this site:
Copyright © 2021-2022 All rights reserved.
Goal-based investing

Click here to create your own investing plan.