What is a Retirement Planning Calculator?

A Retirement Planning Calculator helps you estimate the corpus you need to maintain your lifestyle after retirement. It factors in your current expenses, inflation, expected returns, and lifespan to guide you in building an adequate retirement fund.

How to Use This Calculator?

1. Present Age – Your current age, like how old are you right now. It determines how many years you have until retirement, which is your investment horizon.
2. Retirement Age – The age at which you plan to stop working. This sets the point where you stop accumulating wealth and start withdrawing.
3. Life Expectancy – How long you expect to live. It will be used to calculate how many years your retirement corpus should last.
4. Present Monthly Expense (₹) – Your current monthly living costs. This will be adjusted for inflation to estimate your future retirement expenses.
5. Inflation Rate (%) – The annual increase in the cost of living. Affects how much your current expenses will grow by the time you retire.
6. Reduction in Expense Post Retirement (%) – The percentage reduction in expenses expected after retirement. For example, 40% means your post-retirement expenses will be 60% of today’s. Like if your monthly living cost is 1L, after retirement you may not need 1L beacuse at that time you will not have house rent or EMI, cost for your children education etc.
   If you do not want to reduce, enter zero(0).
7. Expected Return During Working Years (%) – The average annual return you expect on your investments until retirement.
8. Return Rate During Retirement (%) – The average annual return expected on your retirement corpus after you retire (typically more conservative).
9. Calculate – Once all fields are filled, click this to see your required retirement corpus and how much you need to invest regularly to reach it.

Why Plan for Retirement?

1. Maintain your lifestyle – Ensure you don’t compromise on living standards post-retirement despite inflation.
2. Financial independence – Proper planning removes the need to depend on family or social security.
3. Account for medical and lifestyle costs – With longer life spans, medical and lifestyle costs need to be covered for decades after retirement.