When investor Sandeep Jethmalani said Indians may need Rs 40 crore to retire comfortably, the number sounded extreme at first glance. But run the math with inflation, rising healthcare costs, and longer lifespans, and it starts to look reasonable.
What does not look reasonable is the income side of the equation.
Because across datasets, one pattern is impossible to ignore. India is not a high-income country falling short on savings. It is a low-to-middle income economy trying to chase a high-income retirement target.
START WITH THE BASICS: MANY ARE NOT EVEN EARNING STEADILY
Before salaries, there is a more fundamental issue. Employment itself.
According to PLFS 2025, only 57.4% of working-age Indians are employed. Among youth aged 15 to 29, that number drops to 41.4%. Youth unemployment stands at 9.9%.
Even among those who are working, not everyone has a stable salaried job.
In urban India, only about 46.5% of men and 50.9% of women are in regular salaried employment. The rest are self-employed or in informal roles, where income is uncertain and savings are difficult.
So the first reality check is simple. A large share of India is not even earning predictably.
THE PLACEMENT CRISIS: DEGREES WITHOUT PAY
Now look at fresh graduates entering this market.
The Unstop Talent Report 2026, based on more than 37,000 students, paints a stark picture:
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84% of general undergraduates are not placed
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85% of engineering students are not placed
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74% of MBA students are not placed
Even among those who do get jobs, the terms are shifting. Nearly 90% of students said they are willing to accept lower salaries than expected just to secure employment.
This is not just a slowdown. It signals a structural shift where demand no longer matches the growing supply of graduates.
THE 90% SIGNAL THAT CHANGES EVERYTHING
That willingness of almost 90% students to settle for lower pay is the defining number of this generation.
Students once entered the job market negotiating for better offers. Today, many enter hoping for any offer.
The same report shows that a majority expected salaries above Rs 5 lakh annually, but only a fraction reached that level. This gap between expectation and reality shapes everything that follows, from savings to long-term wealth creation.
Because your first salary is not just a starting point. It sets the base for your entire financial trajectory.
WHAT PEOPLE ACTUALLY EARN: THE HARD NUMBERS
To understand the real picture, you have to combine multiple datasets.
Here’s the degree-wise salary reality in India across placement reports and survey data:
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General undergraduate degrees: Rs 3 to 5 lakh annually for a large share
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BTech graduates outside elite institutes: typically Rs 4 to 7 lakh
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MBA graduates outside top B-schools: largely in the Rs 6 to 12 lakh range
Data also shows:
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34% of UG students earn Rs 3 to 5 lakh
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39% of BTech graduates earn below Rs 7 lakh
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30% of MBA graduates earn below Rs 10 lakh
The takeaway is clear. The salary gap between degrees is shrinking. MBA and BTech no longer guarantee a major financial jump.
GOVERNMENT JOBS: STABLE BUT NOT HIGH-PAYING
Government jobs are often seen as the safest path.
They do offer stability. But the salary data tells a different story when it comes to wealth creation.
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Entry-level roles: Rs 3 to 6 lakh annually
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Mid-level roles: Rs 6 to 12 lakh
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Senior bureaucracy: Rs 15 to 25 lakh
These incomes provide security, but they do not typically allow for the kind of aggressive savings required to build multi-crore retirement wealth.
INDIA’S BASELINE INCOME: MUCH LOWER THAN YOU THINK
Step back further and look at the broader income picture.
Household income surveys such as CMIE show:
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Median monthly household income around Rs 15,000 to 20,000
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Many individuals earning below Rs 10,000 to 15,000 per month
This is the financial reality for a large segment of the population.
It is far removed from the income levels needed to invest heavily and consistently over decades.
SALARY GROWTH: SLOW FOR MOST, FAST FOR A FEW
Even for those in corporate jobs, growth is uneven.
Industry data shows:
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Typical annual salary increments between 8 to 12%
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Higher jumps of up to 30% limited to niche skills like AI, semiconductors, and advanced tech
So while there are success stories, they are not representative of the average worker.
For most people, income growth is steady but not transformative.
WHAT INDIA EARNS VS WHAT IT NEEDS
Put all of this together, and the mismatch becomes clear.
What people earn:
- UG: Rs 3 to 5 lakh
- BTech: Rs 4 to 7 lakh
- MBA: Rs 6 to 12 lakh
- Government jobs: Rs 3 to 10 lakh range
What retirement needs:
- Target corpus: Rs 40 crore
- Implied peak income: Rs 1 to 2 crore annually
- Savings requirement: 20 to 25 times annual expenses
- This is not a small gap. It is a structural mismatch.
THE MATH BEHIND RS 40 CRORE
The logic behind the number is straightforward.
Financial planners often use the 25x rule. You need around 25 times your annual expenses to retire comfortably.
If future annual expenses reach Rs 1.5 to 2 crore due to inflation, the required corpus naturally climbs towards Rs 30 to 40 crore.
But this assumes something critical — that incomes will also rise enough to support such savings.
But that assumption does not hold for most people.
WHY THE RS 40 CRORE TARGET BREAKS DOWN
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To realistically reach Rs 40 crore, you need:
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Decades of high and stable income
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Consistent, large-scale savings
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Strong investment returns
But the data shows:
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Many struggle to enter stable jobs
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Entry salaries are modest
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Growth is moderate for most sectors
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Informal work limits long-term planning
Even with steady progression, someone starting at Rs 5 to 7 lakh may take 15 to 20 years to reach Rs 20 to 30 lakh annual income.
At that level, building a Rs 40 crore corpus becomes extremely difficult without exceptional circumstances.
THE HIDDEN PROBLEM: JOB QUALITY, NOT JUST JOBS
There is another layer to this.
PLFS data shows a large share of workers are self-employed or in informal jobs. Regular salaried employment forms a smaller portion of the workforce.
This matters because wealth building depends not just on income, but on predictable income.
Irregular earnings make long-term saving and investing far harder.
WHO CAN ACTUALLY REACH RS 40 CRORE?
A small segment:
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Top-tier professionals in high-growth sectors
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Entrepreneurs and business owners
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Specialists with global, high-demand skills
For everyone else, the number is less a target and more a theoretical benchmark.
THE REAL STORY: IT’S NOT ABOUT EXPENSES, IT’S ABOUT INCOME
Most discussions focus on rising costs.
But the deeper issue is income distribution.
India’s challenge is not that people are failing to save. It is that most people do not earn enough to save meaningfully over long periods.
WHAT THIS MEANS FOR YOUNG INDIA
If 90% of freshers are already compromising on salaries, and most career paths do not offer rapid income growth, then the traditional path of education to job to stable wealth looks weaker than before.
The Rs 40 crore number is not wrong in theory. It reflects future costs.
But in practice, it exposes a much bigger gap between what Indians earn today and what they will need tomorrow.
And unless incomes rise significantly or career strategies change, that gap is only going to widen.
– Ends
