Methodology
Every calculator on this site makes assumptions. Most calculators hide them. This page is where ours are written down, along with the reasoning, so you can disagree with a specific number rather than with the whole tool. If you think 3.3% is too conservative or 12% is too optimistic, you can change both and see what happens.
Why 3.3% and not the 4% rule
The 4% rule comes from American research on American portfolios. The original work looked at US stocks and bonds over historical 30 year windows and asked what starting withdrawal rate would have survived every one of them. Four percent, adjusted upward for inflation each year, was the answer that held up. It has been repeated so often since that people treat it as a law of nature. It is a finding about one country's market history over one particular length of retirement.
Three things about India break it.
Inflation runs higher. US long-run CPI sits around 2 to 3%. India's runs closer to 6%. That gap compounds viciously over a long retirement. At 6%, your cost of living roughly doubles every twelve years, so a ₹60,000 monthly budget at 45 needs to be around ₹2,40,000 by 69 just to buy the same groceries and pay the same maintenance.
There is no pension underneath you. An American retiree who draws down too fast still has Social Security as a floor. It is not a comfortable floor, but it exists and it is inflation-indexed. An Indian who retires at 45 outside government service has EPS at best, which is small, and nothing else. If the corpus runs out, that is the whole story.
Early retirement is longer than retirement. The 4% rule was tested over 30 years. Someone retiring at 42 and living to 88 needs the money to last 46. Withdrawal rates that survive 30 years fail noticeably more often over 45, because there are simply more chances for a bad decade to land at the wrong time.
So we use 3.3%. We should be straight about where that figure comes from: it is a judgement, not something derived from a study of Indian market history the way 4% was derived from American data. India does not have the same length of clean, survivorship-free index data to run that analysis on. Three point three percent is roughly what you get by taking the American number and stepping it down for higher inflation and a longer horizon, and it happens to correspond to the tidy mental shortcut of needing about 30 times your annual expenses.
Reasonable people land elsewhere. We have seen 3.5% argued well, and 3% argued by people who are more cautious than us. If you want to use a different figure, every calculator here lets you set it under the advanced assumptions.
The defaults, and where they come from
| Parameter | Default | Where it comes from |
|---|---|---|
| Inflation | 6% | RBI long-run CPI average. Headline CPI has run lower in some recent years, but household inflation for a middle-class family is usually worse than headline, because education and healthcare rise faster than the basket. |
| Safe withdrawal rate | 3.3% | Our judgement, reasoned above. Not a derived constant. |
| Equity returns | 12% | Nifty 50 total return, roughly 1995 to 2024. This is history and nobody owes it to you going forward. |
| Debt returns | 7% | Broad average across FDs and gilt funds. Post-tax it is a fair bit less. |
| Balanced portfolio (60:40) | 9.5% | Weighted blend of the two above. |
| LTCG on equity MF | 12.5% above ₹1.25L/yr | Finance Act 2024. |
The formulas
Nothing here is complicated. If you want to check a result by hand, or rebuild any of this in your own spreadsheet, these are the exact expressions the calculators use.
FIRE number
FIRE number = (monthly expenses × 12) ÷ SWR
At 3.3% that works out to about 30 times your annual spending. Expenses go in at today's prices, and the target is expressed in today's rupees too.
Corpus growth
Corpus(n) = C₀ × (1+r)ⁿ + PMT × ((1+r)ⁿ − 1) ÷ r
r is the monthly rate, n the number of months, C₀ what you have today and PMT what you add each month. Compounding is monthly throughout the site.
Future cost of something
Future cost = today's cost × (1 + inflation)ⁿ
CAGR
CAGR = (ending value ÷ starting value)^(1 ÷ years) − 1
Real (inflation-adjusted) return
Real return = ((1 + nominal) ÷ (1 + inflation)) − 1
Note this is not simply nominal minus inflation. At 12% and 6% the real return is 5.66%, not 6%. Small difference, and over thirty years it is not small at all.
What these calculators do not model
This is the part most tools skip. Each of these is a real gap, and for some households the gap matters more than anything the calculator gets right.
- Sequence of returns. The calculators apply a smooth annual return. Real markets do not. A crash in your first three years of withdrawals does far more damage than the same crash at 70, because you sell units cheap and those units never come back for the recovery. The SWP calculator has a stress test for this. The others assume a straight line.
- Your actual tax position. We apply LTCG at a flat rate where it is relevant. We do not model your slab, your other income, set-off of losses, or the ₹1.25 lakh annual exemption being consumed by something else.
- Health shocks. A single hospitalisation can take a year's withdrawals. Insurance premiums also rise steeply after 60, well ahead of general inflation, and that is exactly when your cover matters most.
- Property, gold and EPF withdrawal rules. If a large part of your net worth is a flat you live in, it is not spendable corpus and should not be entered as such.
- Family obligations. Parents' medical costs, a sibling's education, a wedding. These are large, common in Indian households, and almost never in anyone's FIRE spreadsheet.
- You changing your mind. Most people who reach FIRE keep earning something. The calculators assume income stops dead on the day you retire, which is the conservative assumption but rarely the true one.
How to use any of this
Run the numbers twice. Once with our defaults, once with assumptions you would be embarrassed to describe as optimistic - say 9% equity returns and 7% inflation. If the plan survives both, you have something. If it only works on the first run, you do not have a plan, you have a hope. That second run is the single most useful thing these tools can do for you, and it takes another thirty seconds.
The calculators are at /calculators, and if you think one of the numbers on this page is wrong, please tell us.
Not financial advice. planMyFIRE is not a SEBI-registered Investment Adviser. Calculator results are estimates based on historical assumptions and are for educational purposes only. Past market returns do not guarantee future performance. Consult a SEBI-registered adviser before making investment decisions. Terms of use.