A retirement calculator is a user-friendly tool that simplifies the process of calculating an ideal corpus and how much money you should save every month to achieve the objective. It is available online and is absolutely free of cost.
It helps calculate an ideal corpus by considering various factors, including current age, desired retirement age, current savings, expected returns on current investments, expected returns post-retirement and inflation rate. You can have a better understanding of what this corpus, by simply filling in these details. The calculation also incorporates the number of years the resultant figure will last. You can experiment with different scenarios to see the impact of various inputs.
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The most important question is – how much money should you aim to have at the time of your retirement? It is that time of your life when you need to be financially comfortable, without any responsibilities. While how much money would be comfortable for an individual can be subjective, depending upon your lifestyle and other compulsions, you can certainly achieve the objective with careful planning and saving. A retirement calculator is an effective tool to help you take the first step in working towards this crucial life goal.
After all, everybody deserves to live their golden years with peace and tranquility.
To determine your ideal corpus, you can use the retirement calculator online.
1. How do retirement calculators differ from simple savings calculators?
While useful, a simple savings calculator only totals the amount you save every month. A retirement calculator, on the other hand, factors in inflation, returns on your investments before and after retirement, your life expectancy, your desired corpus amount, and your desired retirement age.
2. Why is factoring in inflation important in retirement planning?
Inflation directly reduces the purchasing power of money. Therefore, a retirement corpus that may seem large today may not be enough 20 years from now. It is essential to factor in inflation while building one’s retirement corpus.
3.How does starting retirement planning early make a difference?
Starting one’s retirement planning early via planned investments allows one to leverage the power of compounding. Investing and reinvesting one’s money consistently over time may allow one to earn returns not just on the principal investment amount but also on the returns that their initial investment accumulates over time. one to earn returns not just on the principal investment amount but also on the returns that their initial investment accumulates over time.
4. What if I expect irregular expenses after retirement?
It is always prudent to factor in slightly higher monthly expenses than one may expect to account for unforeseen contingencies, such as travel, accidents and illnesses, home repairs, or other such emergencies.
5. Can I plan for early retirement using retirement calculators?
By lowering your expected retirement age in our retirement calculator, you can see how much extra you’ll need to put aside every month (Based on your expected expenses and how long you expect your retirement corpus to last) to be able to stop working earlier than the usual retirement age of 60 in India.
6. Can I use retirement calculators to plan for retiring abroad?
While it is possible to use retirement calculators for retiring abroad, it is important to adjust your expected expenses for the cost of living and inflation in your chosen country.
7.How to account for changing lifestyles during retirement?
It is ideal to run multiple scenarios while using retirement calculators. One for essential, and in that sense, fixed expenses, and another for discretionary spending — to get a realistic corpus requirement and timeline for it to last.