Retirement Calculator
Plan your journey to financial independence.
You will need a corpus of
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Monthly Savings Needed
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Total Amount Invested
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Your Investment Growth
What is Retirement Planning?
Retirement planning is the process of setting financial goals for your post-work life and taking actions to achieve them. It involves determining your desired retirement lifestyle, calculating the total amount of money you’ll need (your retirement corpus), and creating a disciplined investment strategy to accumulate that sum. A good plan accounts for factors like inflation, life expectancy, and investment returns to ensure you can live comfortably without a regular salary.
How to Invest for Retirement
Investing for retirement is a long-term journey that benefits from an early start and a diversified approach. Here are some common investment avenues:
- Equity Mutual Funds (SIP): Investing a fixed amount monthly in equity funds can help you benefit from market growth and the power of compounding over the long term.
- Public Provident Fund (PPF): A government-backed, tax-efficient scheme with a lock-in period of 15 years, offering stable and predictable returns.
- National Pension System (NPS): A voluntary, defined contribution retirement savings scheme designed to enable subscribers to make optimum decisions for their future.
- Real Estate: Investing in property can provide both capital appreciation and a source of rental income during retirement.
Frequently Asked Questions
Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. The ₹50,000 that covers your expenses today will not be enough in 20 or 30 years. This calculator uses the inflation rate to project your future expenses and calculate a corpus that will maintain your lifestyle.
Pre-Retirement is your accumulation phase, where you are working and can typically take on more risk for higher returns (e.g., investing in equities). Post-Retirement is your withdrawal phase, where your primary goal is capital preservation. It is generally advised to shift your corpus to safer, lower-return investments (e.g., bonds, fixed deposits) to generate a steady income.
First, the calculator projects your annual expenses at the time of retirement using the inflation rate. Then, it uses the “4% Rule” as a baseline, a common financial guideline which states that you can safely withdraw 4% of your total corpus each year without depleting it. Therefore, your required corpus is your projected annual expenses divided by 4% (or multiplied by 25). This is then adjusted based on your post-retirement return expectations.