Retirement Replacement Ratio
✓ Last verified 14 Sep 2026
The short version
Retirement replacement ratio is the percentage of your pre-retirement income your retirement plan is designed to replace each year - a commonly cited target range, but one that should be checked against your own actual expected post-retirement expenses, not assumed.
If your pre-retirement income was ₹1 lakh/month and your retirement plan targets ₹70,000/month in today's terms, your replacement ratio target is 70%. Commonly cited target ranges assume some expenses (commuting, work clothing, loan EMIs that get paid off) naturally reduce after retirement - but this varies significantly by individual, especially if healthcare costs rise to offset those savings. See our article on how much you actually need to retire for building this from your own real expected expenses rather than a generic percentage.
Want this worked out for your own numbers?