Required Corpus Calculator
The pot you need so a yearly shortfall is covered for as long as it lasts.
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Required Corpus Calculator
The pot you need so a yearly shortfall is covered for as long as it lasts.
- Corpus remaining
- Drawn that year
How the required corpus calculator works
Most retirement maths starts from your expenses. This starts from the gap — the part of a year’s spending that your own money has to cover once a pension, rent, a spouse’s salary and everything else has been counted. That gap is the number people can actually state, and it is the number the corpus exists to fund. The formula is the present value of a growing annuity: corpus = annual shortfall × [1 − ((1+g)/(1+r))^N] ÷ (r − g), where g is how fast the shortfall grows, r is what the corpus earns, and N is how many years it has to last.
How to Use: 1. Enter the "Annual shortfall" in today’s money — this year’s spending minus this year’s other income. 2. Set "Shortfall grows at" to the inflation you expect on that spending, not on the economy generally; a retirement heavy on healthcare grows faster than headline CPI. 3. Set "Corpus earns" to a realistic post-tax return on a portfolio you can actually hold through a bad year. 4. Choose how many "Years to cover".
Understanding the Results: The headline is the pot you need on day one. The chart draws that pot down year by year and lands on zero in the final year — the closed form checking its own arithmetic — and its shape is the useful part: the balance barely moves for years, then falls away sharply, because withdrawals keep growing while the pot shrinks. Watch the gap between the two rates rather than either one alone. What matters is the real return, (r − g) ÷ (1 + g), and at 8% returns against 6% inflation that is under 2%, which is why the corpus is so much larger than a first guess. If the shortfall grows faster than the corpus earns, the figure climbs steeply and the tool says so, because at that point no realistic sum lasts and the plan has to change rather than the spreadsheet.
The formula
Corpus = C × [1 − ((1 + g) ÷ (1 + r))^N] ÷ (r − g)
- C: this year’s shortfall
- g: how fast the shortfall grows
- r: what the corpus earns
- N: the number of years to cover
It is the present value of a growing annuity. The year-by-year schedule draws the pot down to zero in the final year.
A worked example
Covering a shortfall of ₹6,00,000 a year that grows at 6% for 25 years, from a corpus earning 8%, needs about ₹1,11,99,301 up front.
Questions people ask
What is a required corpus?
The lump sum that, while invested, can pay a yearly shortfall that keeps growing, for as many years as you need. The shortfall is your spending minus your other income, such as a pension or rent.
Why is the corpus so much bigger than I expected?
Because what matters is the return after the shortfall’s own growth. At an 8% return against 6% growth, that real return is under 2%, so the pot has to be large to last.
What if the shortfall grows faster than the corpus earns?
Then no realistic sum lasts very long and the figure climbs steeply. The calculator says so, because at that point the plan needs to change: lower spending, more income, or a higher-earning portfolio.
Related calculators
- Retirement Calculator: Estimate the retirement corpus you need and the monthly saving required to get there, adjusted for inflation and returns.
- Purchasing Power Calculator: See what any amount is really worth after inflation: its buying power in today’s money, and what you would need later to match it.
- SIP Calculator: Free SIP calculator: see how a monthly mutual-fund SIP compounds over time, total invested vs. projected value, and plan your SIP in seconds.
Further reading
Estimates are for illustration only and assume constant returns. Actual returns vary with market conditions. This is not investment advice.