Falling between 27 and 42 years of age, most millennials often accord high priority to their lifestyle expenses and short-term goals instead of forming post-retirement fund. For them, retirement planning is a goal that can be performed later in life. However, the rising healthcare expenses, life expectancy and inadequate old-age social security have increased the need to create an adequate post-retirement corpus.

Mentioned here is a stepwise guide for the millennials to form their post-retirement fund –

  • Begin investing at the earliest

The earlier you begin, the lesser contribution you require to attain your retirement goal. Starting your investments early even instils financial discipline and helps you make the most from the compounding effect. Due to the benefit of compounding, the gains earned from the investment start generating returns on their own, thus growing to a higher corpus in the long time period.

For example, a 20-year-old would require investing a monthly SIP of only Rs 2,000 at an assumed annualised rate of return of 13 per cent to form a retirement fund of Rs 3.24 crore by the age of retirement. For a 50-year-old forming the same retirement corpus at the same return rate over the upcoming 10 years would need a monthly investment in SIP mutual fund of Rs 1,32,600. So, by starting your investments early, you can generate an adequate retirement corpus with smaller monthly investment. To compute the above calculation, you may use an online retirement calculator.

Now, you may wonder – what is a retirement calculator? And what inputs must you provide to compute the adequate retirement corpus? An online retirementcalculator is a tool that assists you plan out your retirement corpus. Also, it can assist you determine the monthly amount you must invest to reach the desired retirement corpus goal.

Here, in this calculator, you just need to input three crucial parameters to compute your expected investment return i.e., preferable SIP amount, investment duration, and expected return rate on the fund. Once you input all these three inputs, the retirement calculator instantly displays the outcome in just seconds. You can try as many combinations as possible using the online calculator to compute the deal of your choice.

  • Account for inflation

When estimating the retirement fund, note that you must account for the rate of inflation. As inflation lowers the buying power of money, avoiding it may make you accumulate less for your post-retirement days. This would enhance your probability of facing financial crunches in your retirement life and thus, propel you to continue working.

  • Buy sufficient health policy

Given the rapid rise in India’s expense, the requirement for purchasing sufficient health policy has become crucial. As your existing age is one of the important parameters determining your health policy premium, purchasing a medical policy later may cost you a higher premium.

Additionally, health insurance generally come with a waiting period before you can claim for surgeries, treatments, etc. Buying health policies early allows you to complete the waiting period during the span when your probability of acquiring any of the listed diseases in the policy are minimal.


So, if you are young and have started working, then ensure to take control of your retirement planning. Doing so would give you adequate time to form a financially secure future for your golden years.