Retirement Planning Calculator

Well, this is an insightful question that every common person comes across. Savings for your retirement should focus on living a comfortable life and ensuring that you don’t outlive your saved funds. The question ‘How much to save for your retirement?’ actually depends on multiple answers like your lifestyle, your current income earning, how long you will live post-retirement, and how long will you need your retirement account to last. You can work out the amount required for your retirement plan just by using an online Retirement planning calculator.

If you are planning to retire in your 60's you would require around 60-80% of your pre-retirement monthly income during retirement. But in case, you are planning an early retirement, the percentage should be much greater. You can get a fair idea of how much money you need to save at the end of each month to fund a suitable retirement income by using a Retirement calculator.

The amount of pension is 50% and depends on the returns or average returns whichever is beneficial to the individual. As per the Government of India, the maximum limit on pension is 50% of an individual’s highest pay and the minimum pension currently is ₹9000 per month. To make sure your average gains you can use a monthly pension calculator.

Employee’s Monthly Salary = Pensionable salary X Pensionable service / 70

• Pensionable salary is the average salary you drew in the last 12 months before exiting the EPS scheme.
• Pensionable serviceis basically the actual service period of the employee. Every time you switch from one job to the new one, as an employee, you will receive the EPS certificate which you’ll have to submit to your new employer.

The amount of money you will need on a regular basis for your daily living costs plus unforeseen costs and costs incurred on luxuries should constitute your retirement corpus.

To estimate your retirement corpus, draw up a list of the total expenses you currently incur. Identify goals post-retirement and make provision for a healthcare budget. You then need to make an estimate of your expected income after your retirement. Which can include EPS pension, interest income from fixed deposits, any other investment income, etc.

The amount of pension you get after your retirement will completely depend on the amount you invest in a pension plan regularly, among other factors. The best way is by investing in a good pension planner while you are still working. As a government employee, you are entitled to a fixed pension. Whereas, if you are working in a private organisation and making PF contributions then you are eligible for pension under the Employees' Pension Scheme (EPS) on fulfilment of some terms and conditions. Apart from these cases, you need to contribute and plan your own pension when you retire.

Your retirement plan should be calculated considering your present expenses, which you can look into an online Retirement calculator. The amount will be created assuming 75 years of life expectancy, an inflation rate of 6% (till retirement), a 20% reduction in expenses post-retirement, and the rate of return as per your investment style.