# If someone has 3 crores in bank, and monthly expenditures is 1 lakh, how early is it possible to retire?

Author
Anmol Gupta

Ever wondered if you could retire at the age of 35, or may be 45 to be more realistic? Well, here is how you could achieve it. Originally published on Quora as answer to this question, this brief calculation gives you a glimpse of early retirement planning. Assuming you have accumulated a wealth of INR 3 Crores (through some mysterious source), here is what you’ll need to do.

1. If you are 25 years old currently, you can retire at the age of 35. You need to invest those 3 Crores for next 10 years expecting a return of 8% per annum. That will give you a corpus of 6.47 Crores at the age of 35. You monthly expenses at the age of 35 will be 1.63 Lakh per month.
2. If you are 30 years old currently, you can retire at the age of 38. You need to invest those 3 Crores for next 8 years expecting a return of 8% per annum. That will give you a corpus of 5.55 Crores at the age of 38. Your monthly expenses at the age of 38 will be 1.47 Lakh per month.
3. If you are 35 years old currently, you can retire at the age of 42. You need to invest those 3 Crores for next 7 years expecting a return of 8% per annum. That will give you a corpus of 5.15 Crores at the age of 42. Your monthly expenses at the age of 42 will be 1.4 Lakh per month.

Following is the basis of calculations.

So, you have 3 Crores in bank account and you want to see when can you retire to live a lifestyle costing 1 Lakh per month. The 1 Lakh per month today is going to be 1 Lakh per month after sometime. There will be inflation. Assuming an inflation rate of 5% per annum, the 1 Lakh per month will cost you 1.05 Lakh after one year, 1.27 Lakh after 5 years, 1.63 Lakh after 10 years and so on. Also, assuming that you are expected to live the the age of 85. Now, these 3 Crores should be sufficient to bear the expenses with inflation from the age you retire till you live. Also, assuming that till the time you retire, these 3 Crores will give you 8% return per annum. Post that, you will invest the retirement corpus in an annuity generating instrument giving a return of 7% per annum.

Originally published on Quora as answer to this question.