Stop guessing how much to invest. Start knowing — with 3,000 historically-grounded simulations. If you have ever typed “how much SIP for retirement” into Google, you have already met the problem with most Indian calculators. They hand you a single number. A clean, confident ₹X crore. No range. No stress test. No acknowledgment that markets sometimes fall 51% in a year (yes, 2008 happened).
The Wealthpedia SIP Allocation Optimizer is built on a different philosophy: retirement planning is not a single-point prediction. It is a probability exercise. This tool is the first free Indian calculator that runs 3,000 Monte Carlo simulations grounded in actual Indian market data from 1990 to 2025, combines them with inflation-adjusted FIRE (Financial Independence, Retire Early) modelling, post-tax corpus estimation, step-up SIP projection, multi-goal planning, retirement drawdown curves, and a break-even SIP finder — all in one place, available free, with no login required.
In this article we will walk through every single feature and calculation methodology in detail. By the end, you will understand not just what the tool does, but why each piece of the calculation works the way it does — and why it matters for your financial future.
What Is FIRE and Why Does It Matter for Indian Investors?
FIRE — Financial Independence, Retire Early — is a framework that asks a simple question: how large does your investment portfolio need to be before your annual returns can sustain your lifestyle indefinitely, without you ever working again?
The classic answer, validated by the landmark Trinity Study in the United States, is the 25x rule: multiply your annual expenses by 25, and that is your target corpus. The underlying math is that a portfolio growing at roughly 7% real returns can sustain 4% annual withdrawals (the Safe Withdrawal Rate, or SWR) essentially forever.
But here is the problem: the Trinity Study was built on US stock market data. India is a different animal. Our equity markets have delivered Sensex CAGR of around 14–15% over the long run — higher than the US — but with far greater volatility. We had a −51.8% equity return in 2008. We had a +75.8% bounce in 2009. Our inflation averaged over 9% through the 1990s and sits around 5–6% today. Our fixed deposit rates have fallen from 12% in the early 1990s to 6.5–7.5% now.
A tool that uses American assumptions for Indian investors is not just inaccurate — it is dangerous. The Wealthpedia SIP Allocation Optimizer is calibrated entirely on Indian market realities.
If you want to understand the relationship between monthly investments and retirement corpus in more depth, our article on how much money you need to retire in India is a good foundation. For the basics of SIP math, start with our monthly SIP calculator.
The Input Framework: What You Enter and Why It Matters
Before discussing outputs, it is worth understanding the precision of the input design. Every slider and field was chosen deliberately.
Current Age & Retirement Age (Sliders: 18–75 and 30–80)
These are the two most important variables in retirement planning. Not because of the obvious reason — more years = more compounding — but because of a subtler one: sequence of returns risk.
A 25-year-old and a 45-year-old investing ₹50,000/month will experience wildly different outcomes even if they achieve the same average return over their respective accumulation periods, because the order in which good and bad years arrive changes everything. The Monte Carlo engine handles this precisely.
The slider format (rather than a number input) nudges you to think in terms of ranges — what happens if I retire at 48 vs 52? Drag the slider and the entire analysis recalculates instantly.
Monthly SIP (₹)
This is your regular Systematic Investment Plan contribution. The tool handles this as a monthly annuity-due — meaning each SIP payment earns returns from the moment it is invested, not from the end of the period.
The mathematical formula for SIP future value is:
FV = SIP × [((1 + r)ⁿ − 1) / r] × (1 + r)
Where r is the monthly rate of return and n is the total number of months. However, the tool does not use this closed-form formula directly (which can accumulate floating-point errors over 40+ years). Instead, it uses a year-by-year accumulation loop — growing the balance each month by the monthly rate, then adding the SIP. This approach is computationally more stable and also allows variable annual step-up rates and goal deductions to be applied precisely within the same loop.
Current Portfolio (₹)
If you already have existing investments — mutual funds, stocks, PPF, FDs — this is where you enter the total. The tool compounds this at the same weighted CAGR alongside your ongoing SIPs. This prevents the tool from treating you as a blank slate, which most basic calculators do.
The existing corpus compounds as: FV_existing = Portfolio × (1 + CAGR)^years
Both components — existing corpus growth and new SIP accumulation — are tracked separately in the growth chart, so you can visually see how much of your retirement wealth is coming from your existing savings versus your ongoing investments.
Monthly Expense (₹)
This is your current monthly lifestyle expense. The tool inflation-adjusts this to your retirement age to compute your required retirement income, which then drives the required corpus calculation via the SWR.
If you spend ₹60,000/month today and inflation runs at 6% for 20 years, you will need ₹1,92,456/month at retirement just to maintain the same lifestyle. Most calculators skip this step and use today’s expenses to calculate the corpus, which is a serious underestimation.
Our article on how inflation eats your SIP corpus explains this phenomenon in detail.
Inflation Rate (Slider: 4%–12%)
India’s inflation trajectory has been: very high in the 1990s (averaging 10%+), moderating in the 2000s (3–6%), and settling at 4–7% in the 2010s–2020s. The default is set at 6%, which represents a reasonable long-run estimate. Conservative planners should use 7–8%.
The inflation slider feeds into three separate calculations: future expense estimation, the real value (purchasing power) of your projected corpus, and the monthly withdrawal step-up in the drawdown simulation.
Safe Withdrawal Rate (Slider: 2%–6%)
The SWR is the percentage of your corpus you withdraw annually in retirement. The famous 4% rule (from the Trinity Study) does not map cleanly to India because:
- Indian inflation has historically been higher than the US
- Indian equity markets are more volatile
- Indian retirees tend to live very long lives relative to corpus size
- There is no Social Security equivalent to provide a baseline income floor
Indian financial planners generally recommend 3%–3.5% as a safer withdrawal rate for early retirees. The tool defaults to 3.5%.
The required corpus is calculated as:
Required Corpus = (Future Monthly Expense × 12) / SWR
So if your future monthly expense is ₹1,92,456 and your SWR is 3.5%, your required corpus is ₹65.9 lakh × 12 / 0.035 = ₹6.59 crore.
For an in-depth exploration of how SWR works, see our dedicated Safe Withdrawal Rate calculator and the article on sequence of return risk.
Risk Appetite (Conservative / Moderate / Aggressive)
This single selector controls the entire asset allocation of your portfolio, which in turn determines your weighted CAGR estimate and the volatility profile used in the Monte Carlo engine. The three profiles are:
| Asset Class | Conservative | Moderate | Aggressive |
|---|---|---|---|
| Large Cap Equity | 20% | 30% | 35% |
| Flexi Cap | 15% | 25% | 35% |
| Debt | 45% | 25% | 10% |
| Gold | 10% | 10% | 10% |
| International Equity | 10% | 10% | 10% |
Each asset class has a long-run expected return embedded in the model: Large Cap 12%, Flexi Cap 14%, Debt 7%, Gold 8%, International 11%. These are calibrated against historical Indian market data and are consistent with the broad consensus among Indian financial planners for long-run expectations.
The resulting Weighted CAGR for moderate allocation, for example, is: (30×12 + 25×14 + 25×7 + 10×8 + 10×11) / 100 = 11.4%.
For detailed guidance on how to build a portfolio allocation suited to your life stage, see our portfolio allocation calculator.
Annual SIP Step-Up (Slider: 0%–25%)
This is one of the most powerful and underappreciated tools in the arsenal. A step-up SIP means you increase your SIP amount by a fixed percentage every year — typically aligned with your annual salary increment.
The difference is dramatic. Consider a 30-year-old investing ₹50,000/month for 20 years at 11.4% CAGR:
- Flat SIP: corpus ≈ ₹4.12 crore
- 10% annual step-up: corpus ≈ ₹7.8 crore
- 15% annual step-up: corpus ≈ ₹11.2 crore
That is nearly 3x the wealth from the same starting SIP, purely by stepping up contributions in line with income growth. The tool models this precisely year by year — in year 1 you invest ₹50,000, in year 2 ₹55,000 (at 10% step-up), and so on.
For practical guidance on building wealth progressively, see our article on best SIP strategy for retirement in 2026.
Life Expectancy (Slider: 30–100 years)
The drawdown simulation needs to know how long the retirement corpus must last. The default of 85 years is conservative for Indian urban populations. If your family has a history of longevity, slide this to 90 or 95. The tool will show you whether your post-tax corpus survives to that age.
The Summary Tab: Six Numbers That Define Your Retirement
Projected Corpus
This is the pre-tax total of your existing portfolio growth plus your SIP accumulation at your weighted CAGR, at your target retirement age. It is the headline number — but it is not the number you should be making decisions on. The Post-Tax Corpus and Real Value are more honest.
Post-Tax Corpus
This is where the tool differentiates itself sharply from every basic SIP calculator in India. Tax is not optional — it is a real drag on your corpus. The tool estimates three types of tax liability:
Equity LTCG (Long-Term Capital Gains Tax): Since Budget 2024, LTCG on equity mutual funds held more than 12 months is taxed at 12.5% on gains above ₹1 lakh per financial year. The tool calculates your total equity corpus, subtracts your total equity investment, and taxes the gain at 12.5% after the ₹1 lakh exemption.
Debt Fund Tax: As of April 2023, debt mutual fund gains are taxed at your income tax slab rate (the tool uses 30% as a conservative assumption for wealth-accumulation investors). This is a significant change from the old indexation benefit and makes pure debt funds substantially less tax-efficient.
Gold Tax: Gold ETF and Sovereign Gold Bond gains are taxed at 12.5% LTCG after 12 months, similar to equity. The tool applies the same 12.5% rate on gold gains above the ₹1 lakh exemption.
The post-tax corpus is the amount you actually have available in retirement. The tax drag percentage shows you how much of your gross corpus is consumed by tax — typically 5–15% depending on your allocation and years of investing. This is the honest number.
Step-Up Corpus
This runs the same calculation but with your chosen annual SIP step-up applied. The gap between Projected Corpus (flat SIP) and Step-Up Corpus is usually the most jarring number for new users — and the most motivating.
Real Value (Inflation-Adjusted)
Even a ₹5 crore corpus in 2045 is not ₹5 crore in today’s money. The Real Value converts your future corpus to today’s purchasing power:
Real Value = Projected Corpus / (1 + Inflation)^Years
At 6% inflation over 20 years, ₹5 crore in 2045 has the purchasing power of about ₹1.56 crore today. This is why investing at the rate of inflation is wealth destruction, not wealth creation.
FIRE Probability
This is the probability bar that answers the fundamental question: are you on track?
FIRE Probability = min(100%, (Projected Corpus / Required Corpus) × 100)
Colour coding: Green (≥85%) — you are likely to retire on target. Amber (65–84%) — close, but needs attention. Red (<65%) — significant gap, action required.
Weighted CAGR & Portfolio Longevity
Weighted CAGR is the blended annual return of your allocation mix. Portfolio Longevity answers: if your corpus earns nothing in retirement (a conservative stress test), how many years of expenses does it represent?
Longevity = Projected Corpus / (Future Monthly Expense × 12)
This number should be at least 25 years for a healthy FIRE position.
The Growth Chart: Seeing Your Wealth Build Over Time
The Corpus Growth Projection tab shows three lines:
Total Corpus (green): The sum of your existing portfolio growth plus accumulated SIP contributions, plotted year by year from current age to retirement age. The curve starts shallow and steepens dramatically in later years — this is the visual representation of compounding. The first 10 years may feel frustratingly slow; the last 5 years before retirement will add more wealth than the first 15 combined.
Base Portfolio (blue dashed): Your current investments growing at the weighted CAGR with no new SIP contributions. This line isolates how much wealth is being generated purely by existing savings versus active investment.
Real Value (purple dashed): The inflation-adjusted purchasing power of the total corpus at each point in time. The gap between the green and purple lines widens over time — this is inflation eroding the real value of your nominal corpus.
Goal Deduction Markers (red dots): Any year in which a goal deduction fires — a child’s education at age 42, a home purchase at 38 — appears as a red dot. You will typically see a kink in the green line at these points, showing the corpus dip before continuing to grow.
The Tax Drag Tab: The Hidden Wealth Destroyer Most Calculators Ignore
The Tax Drag analysis deserves special attention because it is almost universally ignored in Indian personal finance tools. The horizontal stacked bar chart shows your pre-tax corpus decomposed into: post-tax value (green), equity LTCG liability (red), and debt tax liability (amber).
For a moderate-risk investor with ₹4.5 crore pre-tax corpus, the typical breakdown might be:
- Post-tax corpus: ₹3.9 crore (87%)
- Equity LTCG tax: ₹45 lakh (10%)
- Debt tax: ₹15 lakh (3%)
The tax drag percentage (13% in this example) represents the compulsory wealth transfer to the government that no amount of smart investing can avoid. Knowing this number helps you make better allocation decisions — for instance, understanding why tax-efficient instruments like ELSS (with its 3-year lock-in and LTCG treatment) or equity-oriented balanced funds often outperform pure debt on an after-tax basis.
The Drawdown Tab: What Happens After You Retire
Most retirement calculators stop at the moment you retire. The Wealthpedia SIP Allocation Optimizer continues the simulation through your entire retirement.
The Drawdown tab simulates month-by-month corpus depletion from retirement age to your life expectancy, assuming:
- You start with the post-tax corpus
- You withdraw the inflation-adjusted future expense each month
- Your remaining corpus earns a conservative post-retirement return of 60% of your accumulation CAGR (reflecting the typical shift to more conservative investments in retirement)
- Each year’s withdrawal increases by the inflation rate
The chart shows two lines — post-tax corpus (green) and base corpus (blue dashed). If either line reaches zero before your life expectancy, the tool flags the depletion age with a warning note. If both lines survive to your life expectancy, it marks “excellent retirement durability.”
This is the critical test of whether your FIRE plan actually works in practice. A plan that reaches ₹6 crore at retirement but depletes by age 72 is not a successful retirement plan.
The Monte Carlo Tab: The Heart of the Tool
This is where the Wealthpedia SIP Allocation Optimizer truly separates itself from every other Indian financial calculator.
What Is Monte Carlo Simulation?
Monte Carlo simulation (named after the famous casino, for its use of random sampling) is a mathematical technique that runs thousands of scenarios with different random outcomes to understand the range of possible results. In portfolio planning, it answers the question: “If the future could play out in many different ways — some good, some terrible — what is the probability distribution of your retirement corpus?”
Why Historical Bootstrap Sampling — Not Random Returns
Most Monte Carlo implementations for Indian tools (the few that exist) use synthetic return generation: they pick a mean return, add a standard deviation, and generate normally-distributed random numbers. This approach has a fundamental flaw — it assumes returns follow a bell curve (Gaussian distribution), when in reality financial returns exhibit fat tails: crashes are more frequent and more severe than a bell curve predicts.
The Wealthpedia tool uses historical bootstrap sampling instead. This means:
- We have 36 years of actual Indian market data (1990–2025), including equity returns (BSE Sensex/Nifty 50 proxy), fixed deposit rates, and CPI inflation for every year.
- Each year of each simulation randomly picks one of those 36 actual years and uses its exact returns.
- This preserves the real distribution of Indian market returns — including the crash years (1995: −23.2%, 2001: −16.2%, 2008: −51.8%), the boom years (1991: +68.8%, 2003: +71.9%, 2009: +75.8%), and the mediocre years.
This is not a theoretical model of how markets might behave. It is the actual historical record of how Indian markets have behaved, randomly recombined across 3,000 different orderings.
The 36-Year Historical Dataset
| Period | Equity Return Range | Key Event |
|---|---|---|
| 1990–1992 | −10% to +68.8% | Harshad Mehta bull run |
| 1995–1998 | −23.2% to +17% | Asian Financial Crisis |
| 2003 | +71.9% | Post-dot-com recovery |
| 2008 | −51.8% | Global Financial Crisis |
| 2009 | +75.8% | Recovery rally |
| 2011 | −24.6% | European debt crisis |
| 2020–2021 | +14.9% to +24.1% | COVID crash & recovery |
The model applies your portfolio allocation to weight each year’s return across equity, debt (using FD rates as a proxy), and gold (estimated as that year’s CPI inflation plus a 2% real return, consistent with historical gold behaviour in India).
How the 3,000 Simulations Work
For each simulation:
- Start with your current portfolio value
- For each year until retirement: a. Randomly pick one of the 36 historical years b. Apply that year’s blended portfolio return (weighted by your allocation) c. Add the year’s SIP contributions (12 monthly payments, each compounded within the year) d. Apply any goal deductions that fall in this year (inflation-adjusted to the target year) e. Apply the step-up SIP increase for next year
- Record the final corpus value after all years
This gives 3,000 terminal corpus values. These are sorted and the percentile outcomes are extracted:
- P90 (90th percentile): 90% of simulations produced more than this value. The optimistic scenario.
- P75/P25 band: The middle 50% of outcomes — the “most likely zone.”
- P50 (median): The middle outcome — what the typical simulation produced.
- P10 (10th percentile): Only 10% of simulations were worse. The stress scenario.
Survival Rate
The survival rate is the percentage of 3,000 simulations that reached at least the Required Corpus. A survival rate above 75% is generally considered robust. Below 50% indicates high fragility in the plan.
This is the most honest answer to “will I be able to retire?” — not a single projection, but a probability.
Why 3,000 Simulations?
Statistical convergence. With fewer simulations, percentile estimates are noisy — you might get P10 = ₹2.1 crore in one run and ₹2.8 crore in the next. At 3,000 simulations, the percentile bands are stable to within about 1–2% across runs, giving you reliable planning estimates.
For a deeper understanding of how sequence risk plays out in retirement, read our article: The Retirement Gamble: How Sequence of Return Risk Can Make or Break Your Golden Years.
The Goal-Based Planning Feature
Real financial lives do not follow a clean accumulation path to retirement. There are children to educate, a home to buy, a wedding to fund. The Wealthpedia SIP Allocation Optimizer lets you add up to as many financial goals as you need, each defined by:
- Goal name: e.g., “Child’s graduation,” “International vacation fund,” “Second home”
- Amount (₹): The target amount in today’s rupees
- At your age: The year you will need the money
The tool inflation-adjusts each goal amount to the target year: if you need ₹20 lakh for education at age 42 (12 years from now at 6% inflation), the actual deduction from your corpus will be ₹40.2 lakh. This is a crucial detail most goal-based calculators miss.
Goal deductions are applied in both the deterministic projection and in each of the 3,000 Monte Carlo simulations — so the survival rate accounts for the real wealth impact of funding life goals while saving for retirement simultaneously.
The Break-Even SIP Finder
This tab answers the most practical question of all: “How much do I actually need to invest each month to retire on my terms?”
The tool uses a binary search algorithm (80 iterations, converging to within ₹1 accuracy) to find the exact monthly SIP that produces the required corpus. You enter your target corpus, select flat or step-up mode, and click “Find break-even SIP.”
The output shows:
- The exact required monthly SIP
- Your current SIP gap (how much more you need per month)
- Your current SIP coverage percentage (e.g., “Your current SIP covers 68% of the required amount”)
- Whether your current SIP is already sufficient
This feature is particularly powerful in combination with the step-up slider. If a flat SIP of ₹1.2 lakh/month seems unachievable, the break-even finder can show that a step-up SIP starting at just ₹60,000/month with 12% annual increases achieves the same target — far more manageable for a professional in the early career years.
How This Tool Compares to Existing Indian Calculators
Let us be honest about what else is available to Indian investors.
ET Money SIP Calculator
ET Money offers a clean SIP future value calculator with fund selection. It shows projected returns based on historical fund performance. However, it does not model inflation impact on expenses, does not model tax drag, has no Monte Carlo simulation, and does not model retirement drawdown. It is a great tool for choosing between funds. It is not a retirement planning tool.
Groww SIP Calculator
Groww’s calculator is straightforward — enter SIP, years, expected return, get future value. Elegant and fast. But again: no inflation adjustment on expenses, no tax, no probability distribution, no step-up SIP modelling, no goal deductions. It answers “how much will I have?” not “is this enough?”
Scripbox Retirement Planner
Scripbox has perhaps the most developed Indian retirement planning tool among fintech apps. It models inflation-adjusted expenses and generates a corpus target. However, it does not use historical bootstrap Monte Carlo — it uses a single expected return assumption — and does not model post-tax corpus or drawdown curves.
Value Research SIP Calculator
Value Research is the gold standard for mutual fund data in India. Their SIP calculators are accurate for individual fund projections. They do not, however, integrate multi-asset allocation, step-up SIP, goal-based deductions, tax drag, or probabilistic simulation.
Wealthpedia SIP Allocation Calculator vs. All of the Above
| Feature | Typical Indian Tool | Wealthpedia SIP Optimizer |
|---|---|---|
| Basic SIP projection | ✅ | ✅ |
| Inflation-adjusted expenses | ❌ | ✅ |
| Step-up SIP modelling | Rare | ✅ |
| Multi-asset weighted return | ❌ | ✅ |
| Post-tax corpus (LTCG + Debt) | ❌ | ✅ |
| Goal-based deductions | ❌ | ✅ |
| Monte Carlo simulation | ❌ | ✅ 3,000 sims |
| Historical data (Indian, 1990–2025) | ❌ | ✅ |
| Retirement drawdown curve | ❌ | ✅ |
| Break-even SIP finder | Rare | ✅ |
| FIRE probability score | ❌ | ✅ |
| Free, no login | ✅ | ✅ |
The gap is substantial. The Wealthpedia tool is not simply a better calculator — it is a different category of tool.
Who Should Use This Tool and How
Young Professionals (Age 22–30)
If you are in the early years of your career, the most powerful thing this tool will show you is the step-up SIP effect. Start with a SIP amount you can afford today, set a 10–15% annual step-up, and watch how the step-up corpus dwarfs the flat corpus projection. The goal-based feature lets you plan for education, a home, and retirement simultaneously from day one.
Read our companion articles: How much to invest every month in India and what should your net worth be at 30 in India.
Mid-Career Investors (Age 30–45)
This is the tool’s sweet spot. You likely have a meaningful existing portfolio and a clear sense of your lifestyle expenses. Use the Monte Carlo tab to stress-test your plan — what is the P10 outcome? If your worst-case scenario (10th percentile of 3,000 historical-data-grounded simulations) still covers your required corpus, you have a genuinely robust retirement plan.
Add your real goals (children’s education at specific ages, home purchase) and see their actual impact on your retirement timeline. The break-even finder can tell you whether a specific salary increment allows you to pull retirement forward by 2–3 years.
See our article on 5000 vs 10000 vs 15000 SIP — which builds real retirement wealth.
Pre-Retirees (Age 45–55)
The drawdown tab becomes critical. You are close enough to retirement that sequence risk is real and immediate. The drawdown simulation shows whether your projected post-tax corpus will sustain your inflation-adjusted withdrawals across your expected retirement period. If the corpus depletes before your life expectancy, the break-even finder can tell you exactly how much additional SIP is needed in the remaining years to close the gap.
FIRE Chasers
If your goal is to retire in your 30s or 40s, the FIRE probability score and the Monte Carlo survival rate are your primary metrics. A survival rate below 70% means your plan is fragile — a single bad sequence of returns (like 2008 happening in year 3 of your retirement) could deplete your corpus. Aim for 80%+ survival rate before pulling the retirement trigger.
The Financial Independence Philosophy Behind the Tool
Most Indian financial tools implicitly accept the conventional retirement age of 60. The Wealthpedia SIP Allocation Optimizer is built on a different assumption: financial independence is a personal threshold, not a government-mandated date.
The tool is neutral on when you retire. It simply shows you the mathematical reality of your choices. Want to retire at 40? The tool shows you the SIP and savings rate required. Want to work until 65 and leave a legacy? The tool shows your corpus projections and sustainability at that horizon.
This philosophy connects to a broader body of work on the Indian FIRE movement. If you are new to FIRE concepts, our article on financial freedom calculator is a good starting point, as is our piece on the ideal savings rate in India in 2026.
Common Mistakes the Tool Helps You Avoid
Mistake 1: Planning in Nominal Terms
Using today’s expenses to calculate your retirement corpus without inflation adjustment. A ₹60,000/month lifestyle today will cost ₹1.92 lakh/month in 20 years at 6% inflation. The tool forces you to see this.
Mistake 2: Ignoring Tax
Many Indians celebrate crossing ₹1 crore in their mutual fund portfolio without accounting for the LTCG tax bill waiting on the other side. The post-tax corpus view makes this unavoidable.
Mistake 3: Planning with a Single Return Assumption
“At 12% CAGR, I will have ₹X crore.” This is a false certainty. Markets do not return 12% every year — they return −51% in some years and +75% in others. The Monte Carlo simulation shows you the range of what is realistically possible, not just the theoretical average.
Mistake 4: Not Accounting for Goals
Saving for retirement and children’s education are not separate problems — they come from the same pool of money. If you plan both in isolation, you will be shocked when education withdrawals derail your retirement trajectory. The goal-based planning feature keeps them integrated.
Mistake 5: No Drawdown Plan
Planning only until retirement day is planning for half the journey. The drawdown simulation answers the full question: does my corpus last as long as I need it to?
The Wealthpedia OS: A Connected Ecosystem of Financial Tools
The SIP Allocation Optimizer does not exist in isolation. It is part of Wealthpedia OS — a growing ecosystem of free, high-quality Indian financial calculators and educational content designed to give every Indian investor access to institutional-grade financial planning tools without the cost of a wealth manager.
For investors who want to measure their current financial health before planning for the future, start with our financial health score assessment.
Important Limitations and Disclaimers
No calculator, however sophisticated, can perfectly predict the future. The Wealthpedia SIP Allocation Optimizer is a planning tool, not a guarantee.
Return assumptions are based on historical data and long-run asset class expectations. Future returns will differ. The historical 1990–2025 dataset captures 36 years of Indian market reality, including multiple crashes and booms, but does not guarantee this distribution will repeat.
Tax calculations are simplified estimates using current tax rules (as of 2025). Tax laws change. The 12.5% LTCG rate, the debt fund slab-rate taxation, and the ₹1 lakh exemption are all subject to Budget revisions.
Inflation projections use a fixed annual rate. Actual inflation will vary year by year and may trend differently from historical averages.
Goal amounts are inflation-adjusted to the target year using the same constant inflation rate. Actual cost inflation for specific goals (education, healthcare, housing) often diverges significantly from headline CPI.
This tool is for educational and planning purposes. For personalized investment advice, consult a SEBI-registered investment adviser.
Frequently Asked Questions
What is the SIP Allocation Optimizer and how is it different from a regular SIP calculator?
A regular SIP calculator takes your monthly investment, an assumed return, and gives you a single future value. The SIP Allocation Optimizer is a full retirement planning engine that models inflation-adjusted expenses, multi-asset weighted returns, post-tax corpus, goal-based deductions, step-up SIP, Monte Carlo probability simulation on 36 years of Indian market data, retirement drawdown curves, and a break-even SIP finder — all integrated in one tool.
What does FIRE stand for and is it achievable in India?
FIRE stands for Financial Independence, Retire Early. It is absolutely achievable in India, but the numbers look different from the US context due to higher historical inflation, different tax treatment, and the absence of social security. The tool is calibrated specifically for Indian conditions.
What is a Safe Withdrawal Rate and what should I use for India?
The Safe Withdrawal Rate (SWR) is the annual percentage of your corpus you can withdraw indefinitely without depleting it. The US benchmark is 4%. For India, given higher historical inflation and greater equity volatility, most financial planners recommend 3%–3.5%. The tool defaults to 3.5% but lets you adjust from 2% to 6%.
Why does the tool use 3,000 Monte Carlo simulations?
At 3,000 simulations, the percentile estimates (P10, P50, P90) are statistically stable — they do not vary meaningfully between runs. Fewer simulations (say, 100 or 500) produce noisy results where the stress percentile changes significantly each time you click.
What is historical bootstrap Monte Carlo and why is it better than synthetic returns?
Historical bootstrap sampling randomly draws from the actual recorded Indian market returns (1990–2025) rather than generating synthetic returns from a mathematical distribution. This preserves the real fat-tail risk of Indian markets — crash years like 2008 (−51.8% equity) have the same probability of appearing in any simulation year as boom years like 2003 (+71.9%).
How is the post-tax corpus calculated?
The tool separates the corpus into equity (large cap + flexi cap + international), debt, and gold components. Equity and gold gains above ₹1 lakh are taxed at 12.5% LTCG. Debt gains are taxed at 30% (income slab rate, per post-April 2023 rules). The total tax is deducted from the gross corpus to produce the post-tax value.
What is the step-up SIP and how does it affect my corpus?
A step-up SIP increases your monthly investment by a fixed percentage every year. At a 10% step-up, ₹50,000/month becomes ₹55,000 in year 2, ₹60,500 in year 3, and so on. Over 20 years, this almost doubles the corpus compared to a flat SIP, purely because you are investing more as your income grows.
How does the goal-based planning work?
You define goals by name, amount (in today’s rupees), and your age at the time of need. The tool inflation-adjusts each goal to its target year and deducts it from your corpus in both the deterministic projection and all 3,000 Monte Carlo simulations. This means the survival rate reflects the real wealth impact of funding life goals alongside retirement.
What does the drawdown simulation show?
It simulates month-by-month withdrawal from your post-tax corpus during retirement, with withdrawals increasing by the inflation rate each year and the remaining corpus earning a conservative post-retirement return (60% of the accumulation CAGR). It shows whether your corpus survives to your life expectancy.
Why does the tool use 60% of accumulation CAGR for post-retirement returns?
Retirees typically shift to more conservative, capital-preserving investments in retirement. A moderate accumulation CAGR of 11.4% becomes approximately 6.8% in retirement — consistent with a shift toward more debt and lower-volatility equity allocation.
What is the break-even SIP finder?
It uses a binary search algorithm to find the exact monthly SIP that produces your required corpus at retirement, in either flat or step-up mode. It gives you a precise gap figure: “You need ₹X more per month than your current SIP.”
How accurate are the asset class return assumptions?
The weighted CAGR is based on long-run historical averages: Large Cap 12%, Flexi Cap 14%, Debt 7%, Gold 8%, International 11%. These are broadly consistent with Nifty 50, diversified mutual fund, and gold historical data over 20–30 year periods. Individual fund returns will vary.
Can I use this tool if I am already investing in mutual funds via a platform?
Yes. Enter your current portfolio value (across all investments), your current monthly SIP total, and your risk profile. The tool will project your trajectory from where you are today.
What should a FIRE probability score of 73% tell me?
It means your projected corpus is 73% of the required corpus. You are on track but not yet there. Options to improve: increase SIP, add step-up, extend retirement age by 2–3 years, reduce planned retirement expenses, or accept a slightly higher SWR.
Is the Monte Carlo simulation affected by my asset allocation choice?
Yes. Each historical year’s return is weighted by your allocation. A conservative portfolio (45% debt) will have much lower variance between simulations than an aggressive portfolio (70% equity), reflecting the actual risk-return trade-off.
How does the tool handle gold returns in the Monte Carlo?
Gold ETF/SGBs are estimated at that year’s CPI inflation plus a 2% real return. This reflects gold’s historical role as an inflation hedge in India. The 2% real return is conservative compared to gold’s actual historical outperformance in certain decades, but appropriate for planning purposes.
What is the difference between FIRE probability and Monte Carlo survival rate?
FIRE probability compares your deterministic projected corpus to the required corpus. Monte Carlo survival rate is the percentage of 3,000 historically-grounded simulations that reached or exceeded the required corpus. The survival rate is more meaningful — a plan with 90% FIRE probability might still have only 65% survival rate if the Monte Carlo reveals significant downside risk.
Should I trust a 100% FIRE probability score?
Be cautious. A 100% FIRE probability score simply means your deterministic projection exceeds the required corpus. The Monte Carlo survival rate (which could be 80%–90% even at 100% FIRE probability) is the more honest risk measure.
How do I interpret the P10 outcome in the Monte Carlo?
The P10 outcome is the corpus value that 90% of simulations exceed. Think of it as “what happens in a genuinely bad scenario — not the worst possible, but bad enough that 10% of historical sequences produced this or worse.” Your plan should still be workable at P10.
Does the tool account for EPF or NPS contributions?
Currently, the tool models a single portfolio value and monthly SIP. If you have EPF or NPS, add their current value to your “Current Portfolio” and add your combined monthly contribution (EPF + NPS + mutual fund SIP) as your Monthly SIP. Our separate EPFO pension calculator can help you estimate these figures.
What inflation rate should I use?
India’s CPI inflation has averaged approximately 6% over the last 15 years. If you are planning conservatively, use 7%. If you expect government’s stated targets to hold and structural disinflation to continue, 5–6% is appropriate. Higher inflation assumptions push your required corpus and future expenses up significantly.
Can I use this for planning a child’s SIP as well?
Yes. Simply adjust the current age to the child’s age, set a target retirement/goal age (say, 25 for education), and adjust the expense and SIP figures accordingly. The goal-based feature can accommodate multiple milestones within a single plan.
How often should I re-run this analysis?
At minimum, once a year — ideally around the time of your annual salary revision (to update the SIP amount) and after any major market moves (to update your current portfolio value). Also re-run after any significant life change: marriage, a child, a job change, buying a home.
Does the tool work for NRI investors?
The tool is usable for NRIs with the caveat that tax treatment differs (NRIs pay TDS on mutual fund redemptions, and DTAA provisions may apply). The asset allocation assumptions and Monte Carlo simulation are equally valid, but the tax drag calculation should be treated as approximate for NRI situations.
Why does the corpus growth chart look flat early and then steep later?
This is the visual representation of compounding. In the early years, returns are applied to a small base and the SIP additions dwarf them. In later years, returns are applied to a large base — and at 11% CAGR, 11% of ₹3 crore (₹33 lakh) is more than your annual SIP contribution. The curve goes from “savings-driven” to “returns-driven” typically around the midpoint of the accumulation period.
What is sequence of returns risk and how does the tool address it?
Sequence of returns risk is the danger that a bad sequence of early returns permanently impairs your retirement portfolio even if the long-run average return is acceptable. The historical bootstrap Monte Carlo directly captures this — because it draws random years independently, some simulations will experience the worst years (2008, 2011) in year 1 and 2 of retirement, while others will experience them later. The spread between P10 and P90 is a direct measure of sequence risk in your specific plan.
Is this tool free? Is there a premium version?
The tool is completely free, with no login required, no data collection, and no hidden fees. It runs entirely in your browser. This is part of the Wealthpedia mission: institutional-grade financial planning tools, free for every Indian investor.
How is the weighted CAGR calculated?
Weighted CAGR = (Large Cap% × 12 + Flexi Cap% × 14 + Debt% × 7 + Gold% × 8 + International% × 11) / 100. For moderate allocation: (30×12 + 25×14 + 25×7 + 10×8 + 10×11) / 100 = 11.4%. This is the annual expected return used for deterministic projections; the Monte Carlo uses actual historical returns instead of this average.
Conclusion: From Hope to Probability
The fundamental shift the Wealthpedia SIP Allocation Optimizer makes is from hope to probability. Most Indian retirement calculators tell you what to hope for: “If you invest ₹X at Y% return, you will have ₹Z.” This tool tells you what to expect across a realistic distribution of outcomes: “In 78% of historically-grounded scenarios, your plan succeeds. In 22% of scenarios — including the ones where 2008 happens in year 5 of your retirement — it does not.”
That is not pessimism. That is the information you need to make a plan that is genuinely robust, not just optimistic.
Use the tool. Stress-test your assumptions. Add your real goals. Run the Monte Carlo. Understand your tax drag. Simulate your drawdown. Find your break-even SIP. And then invest — with the confidence that comes from knowing your plan holds up not just in the average scenario, but in the difficult ones too.
Wealthpedia publishes free, high-quality financial education and tools for Indian investors. All calculators are built for educational purposes. This article does not constitute investment advice. Please consult a SEBI-registered investment adviser before making investment decisions.