Corpus

Investments

Corpus refers to the total accumulated investment pool -- retirement corpus, education corpus, emergency corpus. It is the target wealth number for a specific goal. Corpus planning starts with defining the future cost and working backwards to required monthly SIP.

In detail

Common corpus targets for Indian households:nRetirement corpus: 25x annual expenses (4% withdrawal rule)nChild education: current cost of course x inflation factor for years remainingnEmergency corpus: 3-6x monthly expensesnHome down payment: 20-25% of target property value + registration costsnnCorpus calculation always uses future value (inflated amount), not today's prices.

Formula

Required corpus = Annual goal amount / Withdrawal ratenRetirement: Annual expenses x 25nGoal corpus = Current cost x (1 + inflation)^yearsnMonthly SIP needed = Corpus / [((1+r)^n - 1)/r x (1+r)]

Real-life example

🇮🇳 India example

Vikram, 30, wants to retire at 60. Current monthly expenses Rs 60,000. In 30 years at 6% inflation: Rs 60,000 x (1.06)^30 = Rs 3,44,204/month. Annual: Rs 41.3L. Retirement corpus needed: Rs 41.3L x 25 = Rs 10.3 Cr. Monthly SIP required at 12% CAGR for 30 years: Rs 23,750.

Frequently asked questions

Is Rs 1 Cr enough for retirement in India? ▼

Probably not. At 4% withdrawal, Rs 1 Cr gives only Rs 33,333/month. After 6% annual inflation, real value drops significantly each year. For most households, Rs 3-5 Cr is a more realistic retirement corpus target for comfortable post-retirement life.