How is my money worked out?
Your plan is worked out month by month. Each month, spending is paid from your income and your safe bucket (fixed deposits, SCSS, savings account or arbitrage funds), and whatever is left keeps growing. When the safe bucket runs low, other holdings are sold to top it up. At the end of each financial year, the tax actually owed on that year's income and gains is worked out and paid.
The plan starts on 1 April and your age steps up each 1 April, not on your birthday. It runs for at least 40 years, longer if you are young, and never past age 110.
Why do I get two answers?
If markets grew evenly. Your plan runs at the fixed rates you enter, the same every year. This gives one age, such as "lasts until 92". It is a useful baseline, but real markets never move like this.
With real ups and downs. The same plan is run 1,000 times. Each run uses real monthly Indian stock market and gold returns from 2007 to 2026, taken in runs of months and put in a different order. The answer is how many of those runs still have money at your planning age, such as "34 in 100".
Why the order matters. When you withdraw every month, a crash in the first few years forces you to sell funds while they are cheap, and that money never gets the recovery. The same crash years later hurts far less. Here are the same 1,000 runs for one plan, ₹4 crore split evenly between FDs and mutual funds and ₹1.5 lakh a month in spending from age 60, split by how the stock market did in the first seven years:
Weak first seven yearsstock market grew under 6% a year · 313 of the 1,000 runs
7 in 100still have money at 92
Good first seven years6% a year or more · 687 of the 1,000 runs
46 in 100still have money at 92
Same plan, same real market years. Together they make the 34 in 100 you see in the calculator.
The two answers also differ for a second reason. The even answer uses the return you enter for mutual funds, 11% a year by default. The real stock market history averaged about 9.5% a year. So part of the gap is lower average returns, not only the ups and downs.
Which way could the answer be wrong?
Every model simplifies. Here is each simplification and which way it pushes your result. 9 make your result look better than reality and 3 make it look worse. Market risk leans optimistic; tax and lifespan lean cautious.
| What the calculator assumes | Effect on your result | Status |
|---|---|---|
| Markets | ||
| Only Indian equity funds and gold follow real historyInternational funds, debt funds and the safe bucket grow at a steady rate, so their ups and downs are not tested. | ▲ Looks better | Simplified |
| Gold's 2007 to 2026 run was unusually strong14.9% a year, helped by the rupee falling. Plans holding gold look better in the market test than a normal decade would give. | ▲ Looks better | Simplified |
| Inflation and safe bucket rates are not testedThey stay at what you set. A burst of high inflation is not part of the market test. | ▲ Looks better | Simplified |
| No long flat decade in the dataThe 19 years include 2008 and 2020, but no ten years of going nowhere. | ▲ Looks better | Simplified |
| Safe bucket rates fall over time by default0.5 points every five years, down to 5.5%. You can change this. | ▼ Looks worse | By design |
| Tax | ||
| Tax slabs are never raised for inflationFY 2026-27 amounts apply every year. If future budgets raise them, your real tax will be lower than shown. | ▼ Looks worse | Simplified |
| Tax on REITs is too lowREITs are treated as price growth taxed only when sold. Their payouts are ignored. | ▲ Looks better | Simplified |
| Tax reliefs are applied in your favourA real filing may not work out as cleanly. | ▲ Looks better | Simplified |
| Your plan | ||
| It plans to the age 1 in 10 people outliveNot the average age. For a couple, it follows whoever is likely to live longer. You can change it. | ▼ Looks worse | By design |
| It assumes you keep following the planSelling in a panic during a crash, or spending more in good years, is not modelled. Guardrails, if switched on, assume you really cut spending. | ▲ Looks better | Not modelled |
| FD and SCSS money can be drawn any timeNo penalty for breaking an FD early. SCSS money is really locked for five years, with interest paid out every quarter. | ▲ Looks better | Not modelled |
| Small effectsFDs compound monthly (banks do it quarterly), rising income grows every month (real pensions and rents step once a year), and tax is paid once at year end. | ▲ Looks better | Simplified |
How is my tax worked out?
Indian tax is not one rate. It is worked out properly, every year, for each kind of income.
- FY 2026-27 slabs, both regimes, every yearThe cheaper of the old and new regime is used each year, including the rebate that makes income up to ₹12 lakh tax-free in the new regime.
- Each kind of income taxed its own wayFD interest, pension, rent, equity funds, debt funds, gold, international funds and REITs.
- 12.5% on long-term gold and international fund gainsSection 112, now section 197 of the new Income-tax Act, as it has been since 1 April 2025.
- Cess and surchargeCess is a 4% top-up on your tax. Surcharge is an extra charge on high incomes, capped at 15% on capital gains, with marginal relief: crossing a surcharge line never costs more than the extra income.
- Gains added up for the whole yearSo the ₹1.25 lakh tax-free equity gains are used once a year, as the law applies them.
- Losses carried forwardSet against gains in later years, for up to eight years.
What else does it handle?
All of these are in the calculator today.
- Spending that rises with prices6% a year by default, and 8% for the medical part of your spending (15% of it by default).
- Pensions, rent and other incomeGovernment, corporate, EPS and family pensions, annuities, rent and deposit interest, each rising or fixed as you choose.
- Many kinds of savingsFDs, SCSS, savings accounts, arbitrage funds, equity and debt funds, gold, international funds and REITs, each grown and taxed its own way.
- Top-ups spread across your holdingsWhen the safe bucket runs low, sales are spread across everything you hold, so gains do not bunch into one year.
- One-time eventsA property sale, PPF maturity, EPF withdrawal or gratuity coming in; a wedding, education, a car or a medical event going out.
- Saving years before retirementIf you are not retired yet, it adds your savings until then and shifts gradually into safer holdings.
- If one partner dies firstA survivor view, with pensions reduced by each scheme's own rules.
- Emergency and medical reservesMoney you set aside is kept out of the plan instead of being spent.
- GuardrailsOptional spending cuts in bad years, so the money lasts longer.
- Booking gains every yearOptional: sells and buys back each year to use the ₹1.25 lakh of tax-free gains.
What is not covered?
These are outside what the calculator does. If one applies to you, treat the answer with more care.
- NRI, RNOR and HUF taxOnly a resident individual's tax is worked out.
- Some holdingsULIPs, individual shares, crypto and Sovereign Gold Bonds cannot be added.
- Plans in more than one currencyAn international fund's return is a rupee figure that already includes the rupee falling.
- Your home, except as a saleA house can be entered as a one-time sale, and a reverse mortgage only as income.
- REIT payoutsOnly the price growth of REITs is counted.
- Advance tax and TDS timingTax is settled once at the end of each year.
See all of this worked out on your own numbers.
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