Retirement Calculator

Know what this Retirement Planning calculator can do ?

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What is the corpus amount you need for retirement
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How much should you put away each month to have a worry-free retirement

What is a retirement planning calculator?

Worry-free retirement is one of the top financial goals that every person has or should have. It is therefore very important to be sure that we are saving and investing enough during our earning years to have a retirement that meets our expectations. 

Use this calculator to figure out if you are investing enough to get you from here to there.

How does a retirement calculator work?

A retirement calculator is a simple tool that helps you arrive at the amount of money you will require to see you through your years post-retirement. This retirement planning calculator will help you plan so you build a corpus that is sufficient to continue your lifestyle even after your retirement. The retirement calculator does this by taking into account your personal details such as current monthly expenses, your current age, the age at which you wish to retire and expected life span. The output will be a great starting point to work towards worry-free retirement. 

What is the retirement calculation formula?

There is no one-size-fits-all retirement calculation formula. How much you require as a retirement corpus is unique to you. It depends on your current lifestyle, the lifestyle you expect to have post-retirement, your age, when you plan to retire, returns on investment and most importantly, inflation. 

PrimeInvestor’s retirement calculator takes all of these factors into account to arrive at the retirement corpus that you would need. It will also tell you how many years you have left to get to this goal and how much you need to invest each month to get there.

Benefits using the Retirement Calculator?

The retirement calculator will help you understand how much corpus you need to create before you retire and how to plan for it. Here are the ways in which it simplifies the process.

  • The retirement calculator comes in handy to estimate how much you need to live comfortably once you retire.
  • The retirement calculator takes into account both inflation during your working years and your retirement years. 
  • It also takes into account how much your retirement corpus will generate, so that you do not find yourself running out of money during the later years.
  • It helps you plan finances better, to check how far away from your goal you are. It helps you plan your working life better as well, ensuring that you are well-placed to live your retired life in peace.
  • It helps you know how much money you have to save every month. Even if this sum is large, it gives you perspective on what you need to achieve. You can start small and slowly increase it later when your income allows.
  • The retirement calculator allows you to choose the right mutual fund schemes as you know how much you have to save and gives you the time-frame as well.

Calculate How Much Do You Need When You Retire

PrimeInvestor’s retirement calculator will simplify the process of calculating the corpus you need to sustain you in your post-retirement years. Here is how to use the retirement calculator.

The retirement calculator is split into two stages, and following are the inputs required:

Inputs at stage 1 of retirement calculator

  • Current monthly expenses: The expenses that you incur every month. Here, exclude expenses that you are unlikely to have post retirement such as servicing home loan or rent if you will not have such expense. Add a component for medical expenses, if you do not have it currently.
  • Current age: Your age now
  • Retirement age: The age at which you want to retire
  • Expected Life span: Age until which you expect to live or till which you expect your retirement corpus to last. Be more conservative in this estimate and go for a longer lifespan to reduce the chances of you outliving your corpus.

Inputs at stage 2 of retirement calculator

  • Current value of existing investments: The current market value of investments you have made so far which you have ear-marked for retirement. Do not include investments meant for other goals such as your children’s education.
  • Expected Inflation: The rate at which general prices of goods and services are expected to increase every year. You can use average inflation rates for the same.
  • Post-retirement investment return: The returns you expect from your investments that you make in your post-retirement portfolio. Bear in mind that your post-retirement portfolio will be dominated by debt-based fixed-income investments and not equity.
  • Pre-retirement investment return: The returns you expect from your investments that you are using to build the retirement corpus.

Output of the retirement calculator

  • Period for which the income is needed: It is the difference between the retirement age and expected life span.
  • Monthly expense at the time of retirement: How much your monthly expense will be post retirement, based on the inflation and current expenses you entered.
  • Total Corpus needed for retirement: The amount of money needed to fund your lifestyle from the time of retirement for your expected life span
  • Future value of current investments: The market value, at retirement age, of the investments you have made so far that are pegged for retirement corpus
  • Corpus required to be built: The difference between the total corpus needed for retirement and future value of your investment made so far. It tells you how much more investment has to be made for retirement.
  • Number of years left to build corpus: The difference between your current age and your retirement age – or how many years you have to invest to build your corpus.
  • Monthly investment needed (Rs): Monthly investment required to reach the retirement corpus.

Use these output values as a guide to get yourself started in preparing for a worry-free retirement.

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