Retirement Planning Calculator
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What is Retirement Planning?
Retirement planning is the process of setting goals for your retirement and taking steps to achieve them. It includes identifying your sources of income, estimating your expenses, implementing a savings program, and managing your assets. By planning for retirement, you can ensure that you will have enough money to live comfortably after you stop working.
Why do you need Retirement Planning?
- Rising life expectancy: People are living longer than ever before, which means you need to have enough savings to last for a longer period of time.
- Increased healthcare costs: Healthcare costs are rising rapidly, and you need to have a plan in place to cover these expenses in retirement.
- Absence of social security: Unlike many developed countries, India does not have a robust social security system to provide for its retired citizens.
- Desire for financial independence: Retirement planning can help you achieve financial independence, so you can live your life on your own terms without worrying about money.
How To Plan for Retirement?
There are a few key steps you can take to plan for retirement:
- Start early: The sooner you start saving, the more time your money has to grow through the power of compounding.
- Set a goal: Decide how much money you will need to have saved for retirement. This will depend on your desired lifestyle and expenses. Our calculator helps you determine this goal.
- Create a budget: Track your income and expenses so you can see where your money is going and where you can cut back.
- Make regular investments: Set up a regular investment plan, such as a SIP, to automate your savings.
- Review your plan regularly: As your life changes, your retirement plan may need to be updated. Review your plan at least once a year to make sure you are on track to meet your goals.
Best Retirement Investment Options
There are a number of different investment options available for retirement planning. Some of the most popular options include:
- Public Provident Fund (PPF): PPF is a government-backed savings scheme that offers a fixed rate of return and tax benefits.
- National Pension System (NPS): NPS is a voluntary retirement savings scheme that allows you to invest in a mix of equity and debt.
- Mutual Funds: Mutual funds are a good option for investors who want to diversify their portfolio and get professional management.
- Equity Linked Savings Scheme (ELSS): ELSS is a type of mutual fund that offers tax benefits under Section 80C of the Income Tax Act.
Frequently Asked Questions
Inflation is the rate at which prices for goods and services rise, reducing purchasing power. The money 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 can take on more risk for higher returns (e.g., investing in equities). Post-Retirement is your withdrawal phase, where your goal is capital preservation. It is generally advised to shift to safer, lower-return investments (e.g., bonds, fixed deposits) to generate a steady income.