Many people carry a mental figure for retirement, often a crore or two, and think it will be enough. In reality, that amount barely covers a single year of expenses today, and the gap widens as you plan for a retirement that is still 15 or 20 years away.
The main culprit is inflation. A lifestyle that costs Rs 1 lakh a month now will cost several times that when you turn 60, and your savings must fund not just the first year but two or three decades of rising costs.
The idea of Financial Independence and Retiring Early (FIRE) has captured the imagination of India’s new generation of wealth creators. Many dream of quitting the corporate world in their 40s or 50s, but experts say the biggest mistake is under‑estimating the money needed.
Sandeep Jethwani, co‑founder of Dezerv, says FIRE should be seen as financial freedom to pursue what matters, not a complete stop of income. "For most people, FIRE is the objective of having financial independence to do what you want and what your passions are," he explains.
The required corpus depends on current spending, life expectancy, and how far you are from age 60. If you plan to retire at 60, assume 7 % annual inflation and a corpus that keeps pace with prices, the numbers climb faster than most expect.
Jethwani warns that many use India’s average life expectancy, which can be risky. "People in their 40s today could live till 90 or even 100. If you calculate your retirement corpus assuming you’ll live only till 75, you could run out of money," he says.
For example, a 40‑year‑old who spends Rs 1 lakh a month today would need about Rs 14 crore at age 60 if inflation averages 7 %. "If my inflation assumption is 7% and my current monthly expenses are 1 lakh, I will need approximately Rs 14 crore by the age of 60 to retire," Jethwani notes.
If monthly spending is Rs 2 lakh, the required corpus doubles to roughly Rs 28 crore, because annual expenses will rise from Rs 24 lakh to about Rs 93 lakh over 40 years.
Vinit Rathi, CEO of Avisa Wealth Creators, points out that the FIRE framework’s 25‑times annual expenses rule often falls short. "The assumption of low inflation does not hold true in India, as lifestyle costs, housing and healthcare typically rise by 6‑9 % annually," he says.
To estimate a realistic retirement number, start investing early, set up a systematic investment plan (SIP), and increase contributions each year. "Retirement planning has become a priority for a large section of investors today, with nearly 75‑80% of clients discussing retirement planning rather than simply early retirement," Jethwani observes.
Ultimately, your FIRE number is not a magic multiple of salary or expenses. It depends on expected lifestyle, inflation, longevity, risk appetite and future goals. The earlier you plan and the more realistic your assumptions, the better your chances of achieving financial independence without compromising your retirement lifestyle.