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How much should I have saved for retirement by 60?

How Much Should I Have Saved by 60 For Retirement?
February 21, 2024


It’s needed, yet it’s dreaded. And that’s what makes retirement planning the most crucial yet the hardest financial decision.

Despite knowing that there would be no certainty of income once we retire, most of us tend to push the retirement savings plan to the later years of our careers. Data suggests, 23% of Indians are not sure about how to plan for retirement while 37% are not even keen to save for that phase. Experts warn, that seeking enjoyment and comfort in the younger days and not saving for the future can actually invite financial crisis when one is no longer able to work or earn. To avoid that trouble, the wisest choice one can make is to plan and start early with retirement savings.

How much to save for retirement by 60?

Technically, there’s no specific answer to this question as how much one needs for a smooth and happy retired life depends on his/her perception and expectations for life, as well as on the expected income in that phase, estimated inflation, amount of debt and expenses, and expected years of living. However, financial advisors suggest a few thumb rules to arrive at a figure or benchmark which can be a feasible target for a comfortable lifestyle.

  • One theory suggests, saving 15% of the annual income every year (including employer’s contribution) can be appropriate for many.

  • Another popular theory says the ideal corpus for retirement should be 7-8 times your salary by the start of your 60’s.

  • According to the 30X rule of retirement, for a comfortable retirement, the total savings should be 30 times your current annual expenditure.

Tips for saving for retirement by 60

While there are no fixed formulae for estimating the retirement corpus, one can always try and save the maximum possible amount. Here are a few tips on that:

  • Start early on retirement savings when you have fewer liabilities. The earlier you start, the higher you benefit.

  • As your income grows with age, focus on saving a higher percentage of it accordingly. This will help in fighting inflation.   

  • Get medical insurance at lower premiums when you are young. The coverage will be a great support when you face health issues at an older age.

  • Purchase life insurance with a return of premiums option which can provide a life cover on one hand and pay you into a lump sum corpus at maturity, on the other.

  • Invest wisely. Focus on growing your returns by investing in sound pension plans while you are young and protect your capital at an older age. A good pension plan calculator can help you evaluate your needs, by factoring in future inflation, and help you choose the right plan for your needs.

  •  Capital guarantee solutions can be a good choice while investing in the NPS scheme, pension/annuity plans for a regular flow of retirement income are helpful too.

  • Try and reduce the debt burden by completing your loan EMI schedules.

What is the 4% rule?

The 4% rule suggests one to limit the annual retirement expenditure to 4% of the total savings. This will help in maintaining a comfortable living.

Bottom line

Starting well in time, checking a good pension plan calculator to assess your future needs and then investing in a sound pension plan can give you peace of mind for life.

Whatever your preferences, the idea is to ensure you maintain a decent lifestyle when you no longer have a salary to support your expenses. To accumulate sufficient funds for that, remember to ask four basic questions to yourself.

  • When to retire?

  • What lifestyle I am looking at?

  • Where will I reside?

  • How much loan do I have?

The answers will surely lead to a clearer picture. 

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ARN - ED/11/23/6549

Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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We at HDFC Life are committed to offer innovative products and services that enable individuals live a ‘Life of Pride’. For over two decades we have been providing life insurance plans - protection, pension, savings, investment, annuity and health.