How Much Should Millennials Save to Retire Comfortably?

Written by : Knowledge Centre Team

2026-01-10

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5 minutes read

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Retirement is all about securing a lifestyle you’ve always dreamed of. If you envision any goals like peaceful days in the hills, pursuing hobbies, or spending quality time with your loved ones, having the right retirement plan in place is crucial. With rising costs and longer life expectancy, early and smart retirement planning can make all the difference.

Today’s professionals no longer rely solely on pensions. Instead, they seek flexible, growth-oriented retirement goals and plans that align with their life goals. The key question on every millennial's mind is How much do I need to save to retire comfortably? This blog explores the answer through a practical case study, explains key investment options so that you can you are secure your retirement phase easily.

Key Takeaways

Starting early reduces the financial burden later and helps grow a larger retirement corpus.
Calculate how much you need post-retirement by considering inflation, lifestyle, and healthcare costs.
Combine safe and growth-oriented options to ensure long-term returns and capital protection.
Set aside a fixed percentage of your income regularly to build a strong financial base for retirement.
Structure your retirement income to take advantage of available tax exemptions and benefits.

How Much Do You Need to Save for Your Retirement?

Based on your annual income, you can easily figure out how much retirement savings you need for a comfortable life. You need to chalk out a plan to save a part of your annual income into a savings plan that can yield sufficient returns at the prevailing ROI.

To better understand how to save for retirement, you can refer to the case study given below:

Case Study:

Varun is a 30-year-old finance consultant working in a leading fintech concern based in Delhi. He is earning an annual package of ₹12 lakhs. His ambition is to buy a small plot of land in Dehradun and build a luxury villa, and live a comfortable retirement life over there. No doubt, he requires a lot of savings to fulfil his dream.

Taking into account the prevailing return on investment, i.e., 8%, if Varun’s income is increasing at the rate of 5%, there can be 3 different scenarios:

Retire at 60 with ₹1 Crore: If he saves 9% of his income towards a profitable retirement plan, such as a ULIP, he will save around ₹ 1.08 lakhs in the initial year. Over the next 30 years, he will be able to build a savings corpus of over ₹ 2.28 crores.
Retire at 55 with ₹3 Crores: If he saves 18% of his income towards his retirement plan, he will be able to build a corpus of over ₹3.06 crores over the next 30 years. In this case, Varun had started withdrawing his savings at the age of 55 to fulfil some of his long-term goals, like paying off an outstanding loan or paying for his child’s education.
Retire at 50 with ₹4 Crores: Similarly, if he saves 34% of his income towards retirement, he will be able to build a savings corpus of over ₹3.9 crores by the time he turns 60. In this case, Varun had started withdrawing his savings at the age of 50.

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Where to Invest for Retirement?

Based on the risk appetite, you may opt for one of the following types of retirement investments:

Existing Investments (Provident Funds): If you are salaried, you may have an ongoing contribution to the Employee Provident Fund or the National Pension Scheme. These are completely tax-free retirement investments. This contribution ranges from 10-12% of your monthly income, including your employer’s contribution.

You can claim the tax deduction u/s 80C of the Income Tax Act on your contributions towards EPF and NPS. However, you may be able to reap limited financial growth with these savings instruments.

Note: Tax benefits are subject to change in tax laws. Please consult your tax advisor.
Unit Linked Insurance Plan (ULIP): EPF and NPS can take care of your bare minimum retirement savings needs. However, it is important to invest an additional amount for the safety of your goal, but ULIP plans can be a good option in this direction. It provides:
1. Flexible investment option
2. Tax benefits
3. Portfolio management options for aggressive investors
4. Bonus additions for safe long-term investors
  
  ULIP plans offer you the opportunity to select your investment portfolio among equity, debt, mutual funds, and hybrid funds.
  
  You can consider Promise4Growth Plus by Canara HSBC Life Insurance. It is a flexible long-term plan that blends market-linked investment with life insurance protection.
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9. Premiums qualify for tax deductions under Section 80C, and returns/death benefits may be tax-free under Section 10(10D), as per current tax laws.

Note: Tax benefits are subject to change in tax laws. Please consult your tax advisor.

Final Thoughts

Retirement planning goes beyond saving and calls for smart investment choices aligned with your future goals. You can choose guaranteed income, market-linked returns, or tax-free withdrawals based on your needs. Canara HSBC Life Insurance offers flexible plans like Promise4GrowthPlus and iSelect Guaranteed Future Plus to help you build a secure and comfortable life after retirement. Start early to make the most of your savings journey.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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How Much Do Millennials Need to Save for a Comfortable Retirement?

Key Takeaways