10 steps to calculate how much money you will need for retirement
Close

Buy a Life Insurance Plan in a few clicks

Close

Now you can buy life insurance plan online.

Kotak e-Term Plan

Kotak e-Term Plan provides a high level of protection to your loved ones in your absence. Know more

Kotak Guaranteed Savings Plan

Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and provides an insurance cover against any eventuality. Know more

Kotak E-Invest

Kotak e-Invest plan is a complete Unit-Linked Insurance Plan that can be customized as per your goals and needs. Know more

Kotak Health Shield

Kotak Health Shield Plan helps secure your finances in sudden medical expenses such as Cardiac, Liver, Neuro, and Cancer (all early and significant illness stages/conditions of cancer), along with offering protection for personal accidents - in case of accidental death or disability. Know more

Kotak Lifetime Income Plan

Kotak Lifetime Income Plan gives you the security of your income continuing throughout your life and in your absence throughout your spouse's lifetime! Know more

10 Steps to Figure Out How Much Money You Will Need For Your Post Retirement Plans

10 Steps to Figure Out How Much Money You Will Need For Your Post Retirement Plans
  • 27th Aug 2021 |
  • 515

Retirement is supposed to be a time of tranquillity and responsibility-free living. It is essential to start retirement planning as soon as you start earning to ensure no financial worries later on. The challenge is to figure out how much money you will need for a comfortable life after retirement. It is a common notion that retirement planning is a complicated matter, but it isn’t.

Let’s discuss ten ways to calculate post-retirement corpus.

1. Decide Retirement Age

Although the most prevalent age to retire in India is 60, many people want to retire early so they may pursue a hobby, travel the globe, or do volunteer work. Determining the retirement age will assist in figuring out how much money will be needed to retire comfortably.

Pro Tip: It is advisable to consider life expectancy while deciding the retirement age and money needed at the time of retirement.

2. Calculate Monthly Expense After Retirement

Making a list of monthly expenses after retirement is the first step. The most usual expenses are

  • Grocery bills
  • Utility bills
  • House maintenance
  • Travelling

Pro Tip: Don’t forget to factor in inflation while calculating expense post-retirement.

3. Calculate Monthly Income After Retirement

The second step is to calculate monthly income after retirement. It could be

  • Pension from company
  • Pension from EPF
  • Income from a pension policy

Pro Tip: Any rental income must be calculated according to the estimated value post-retirement.

4. Calculate Net Income Required

The net income required is calculated by deducting monthly expenditure from monthly income.

Pro Tip: If monthly expenditure is Rs. 50,000 and monthly income is Rs. 30,000, then net income required is Rs. 20,000.

5. Calculate Future Value of Required Income

Everyone has the option of retiring at a different age- the additional income required must be calculated according to inflation at that time.

Pro Tip: Experts advise using 6% inflation, the average of the past 10 years, in calculations.

6. Calculate Retirement Corpus

The total amount of money accessible at retirement is referred to as the retirement corpus. Since life expectancy is constantly increasing, it might be a bit tricky to calculate the retirement corpus. Retirement planning, according to experts, should be done until the age of 90.

Pro Tip: Since the retirement corpus must last 25-30 years after retirement, it is best to allocate a portion of the assets towards equity growth.

7. Track and Review the Plan

Once the retirement plan is put into action, it is important to review it periodically. If there are any sudden changes in the financial situation, they must be factored into the plan and adjusted accordingly.

Pro Tip: At least once a year, the retirement plan should be examined to see if it is on track to fulfil the goal.

8. Calculate Current Corpus

The majority of people would have also built up a retirement fund through various financial instruments. Add them all together to find out how much money you have set up for retirement.

The different instruments are

  • PDF
  • PDF
  • NPS
  • Pension plans
  • Insurance policies

Pro Tip: Begin investing as soon as possible. Compounding is a powerful tool that should not be overlooked.

9. Calculate the Additional Corpus Required

To determine how much extra corpus is needed to accomplish the retirement target, subtract step 6 from step 8.

Pro Tip: Remember that these are estimates that are modified for inflation in the future. Taking the worse numbers will aid in better planning.

10. Calculate Additional Monthly Saving to Meet Additional Corpus

Don’t be alarmed if the computations yield a large figure. People who begin investing at an early age will have a long time to accumulate the required retirement fund.

Pro Tip: Keep your financial knowledge up to date. It will go a long way towards establishing the necessary retirement corpus.

Striking a balance between reasonable return expectations and a desired level of living is one of the most difficult components of building a thorough retirement plan. Focus on building a flexible portfolio that you can modify frequently to reflect changing market circumstances and retirement goals.

Kotak Life Time Income Plan

Features

  • 6 Annuity options
  • Tax Benefits
  • Higher Annuity Rates for Higher Purchase Price
  • 4 Annuity Modes

Ref. No. KLI/22-23/E-BB/489

T&C

Browse our library of resources

- A Consumer Education Initiative series by Kotak Life

Similar Articles

Top 4 Mistakes To Avoid While Planning For Your Retirement

How Can ULIPs Help You Plan for Your Child's Future?

The Significance of Number 8,000 in Retirement Planning

Un-Retirement - Are You Ready For It?

How Has NPS Performed in Comparison with Other Instruments?

5 Steps to Gift a Smart Retirement Plan to Your Parents

Types of Annuity Plan | Annuity Definition - Meaning & Key Benefits | Kotak Life

What are ULIPs and their Types?

What is the Minimum Lock-in Period for ULIP?

Save Early to Keep Living Your Dreams Post Retirement

What is the Death Claim Payable in the Case of ULIP?

What is Partial Withdrawal in ULIPs?

5 Common ULIP Myths That You Should Stop Believing

Saving for approaching retirement with retirement insurance

Calculating a Retirement Corpus that can Support Your Lifestyle

यूलिप के 8 शुल्क

Tips to invest your voluntary retirement scheme money

What Are Mortality Charges In ULIP?

What are the Maturity Benefits in a ULIP Plan: Fund Value Sum Assured or Only Fund Value?

Are You Planning an Early Retirement? Here's Why Buying Annuity Plan Will Make Sense

Are Annuities Great For Early Retirement?

FAQs on Taxation of ULIPs

Demystifying the Retirement Planning Process

What Happens to ULIP Premiums Paid if the Market Crashes?

Pros and Cons of Retirement Annuities

How Quickly is Fund Switch Effected in ULIPs? Is it Done the Same Day or After a Particular Number of Days?

Meaning of Sum Assured in a ULIP

Advantages of Pension Schemes and Retirement Plans

ELSS vs ULIP: Which is a Better Investment?

What are the 4 Financial Phases of Retirement? How to Budget For Each One?

What is the difference between Life Insurance and ULIP?

What is ULIP and Its Benefits?

Is it Suggestible to Take a ULIP Plan Linked with a Term Plan?

Benefits Of Retirement & How Investments Can Help You Enjoy Them

What are the Advantages and Disadvantages of ULIP?

Can I Surrender My ULIP Policy after 2 Years?

Looking for Ways to Earn Lifetime Income in Retirement? Here Are 6 of the Top Options

6 Signs That You Are Not Financially Ready For An Early Retirement

Retirement Planning for Millennials

ULIP Plan or Traditional Insurance Plans - Which is better?

Retirement Planning - How To Calculate Your Retirement Premium in India?

ULIP Tax Benefits: यहां निवेश करने पर मिलते हैं 5 बड़े फायदे

How Safe is it to Invest in ULIP plans?

How Does ULIP Work in India?

Importance of Retirement Planning

What are the minimum and maximum investment in ULIP? Would the Whole Amount Insured in The ULIP Insurance be Invested in the Market?

Is ULIP a Good Option for People Above 60?

Getting Close to Retirement? Six Key Retirement Planning Tips That Can Help You Retire

Top 4 Myths About ULIP Investments You Should Know

Long Term Investment Guide for Your Retirement

How To Invest Money In ULIP?

Why Should Retirement Planning Be on Top of Your Priority List?

Is It Worth Buying ULIP Plans For 10 Years?

What are the Differences Between ELSS ULIP and Mutual Funds?

Retirement Planning Guide for Working Men and Women

How to Win at Retirement Savings?

Worried About Running Out of Money in Retirement? 4 Tips to Avoid This Crisis

What is a Retirement Plan - What are its Features?

10 Steps to Figure Out How Much Money You Will Need After You Retire

Is ULIP a Complex Financial Product?

Types of Pension Plans for Your Retirement

Why Should You start Retirement Planning as soon as you start a job?

Can NRIs Invest in ULIP Plans Offered in India?

How to Build a Tax-Free Pension Income for Retirement?

How Does Pension Plans in India Works?

Retirement planning with a systematic life insurance plan

Different Types of ULIP Investments in India

How has ULIP Grown Over the Last 3 years?

A Beginner's Guide to Understanding 401k Retirement Plan

Different Types of Retirement Schemes

What Happens If I Stop Paying My ULIP Policy Premium After Paying the First Premium? Will I Still Get The Return?

Difference Between Unit-Linked Plans and Non Unit-Linked Plans

7 Secrets that can Make Your Post-Retirement Phase Prosperous

Benefits of Early Retirement Plans

Here's What Retirement Would Look Like 30 Years From Now

At What Age Should You Start Your Retirement Planning?

How Can I Achieve My Wealth Goal with ULIP Investment?

5 Retirement Planning Tips for a Financially Controlled Post-Employment Life

Retirement Planning at 50? You Are Still Good to Go

How To Make Most of Your Money After Retirement?

Top 6 Reasons Why You Should Get A Pension Plan

Important Questions To Ask Yourself Before Choosing A Good Retirement Plan

Invest for your second innings with a guaranteed savings plan

What is Lock-In Period in ULIPs?

What is an Annuity Plan and How Does Annuity Plan Works | Kotak Life

Know Why You Should Stay Invested in Your ULIP Plan

What are the Chances of Losing all my Money in ULIP and How Much Return Should I Expect?

Is the ULIP Policy Surrender Value Taxble?

NPS for Housewife

ULIP: Can You Surrender ULIPs or Withdraw Money from It?

Single Premium ULIP or a PPF - Which One is Better?

What is NAV in ULIP, and How is it calculated?

How To Choose The Right Pension Plan?

What is Fund Value in ULIP?

यूलिप के फायदे (Benefits of ULIP in Hindi)

ULIPs or Pension Plans – Which is a Better Retirement Plan?

What Are Superannuation Benefits?

5 Notable Investment Options for Retirees

What Are Retirement Pension Plans?

Managing Your Retirement Income with an insured retirement plan

Terminologies You Should Understand About Retirement Plans

Retirement and Pension Plans in India- What are Your Options?

Do ULIPs Give Good Returns On Investments?

Which are the Best ULIP Plans in India for Children?

What are the Uses of ULIP?

Annuity Plan | How to Choose the Right Annuity Plan | Kotak Life

Types of Retirement Plans

What are the Instruments Available for Building a Retirement Corpus?

How To Keep Your Retirement Accounts from Being Hacked?

How Much Corpus Does One Need for Retirement?

Why Are ULIPs Called Flexible Investments?

How should one decide on fund allocation within NPS?

Ten Signs That You're Ready to Retire

Why You Should Invest In An Annuity Plan?

What To Do With Your Retirement Accounts During An Employment Lapse?

Who Gets the Benefit After the Maturity of ULIP: The Proposer or The Life Insured?

What is Premium Redirection in ULIPs Plans | ULIP Insurance Plans | Kotak Life Insurance

What is the Difference Between EPF, VPF, and PPF? What are Their Tax Benefits?

A Quick Guide to Retirement Plans

Which Pension Plan Suits You best?

Importance of financial Planning for Retirement

How to Choose the Best ULIP Plans to Invest in 2022?

Does Having Both ULIP Plan and Other Health Insurance Plan Make Sense?

How Does NPS Work?

5 Reasons to Buy ULIP for a Secured Financial Future

How To Calculate The Present Value And Future Value Of Annuities?

Benefits of Early Retirement Planning in India

Retirement: A New Start to Life!

How Is ULIP Different from Other Life Insurance Plans? Where Can I Invest - ELSS, ULIP, or PPF?

Is ULIP Better Than FD?

Is it Advisable to Withdraw the ULIP Insurance Policy After 5 Years?

Which Is Better: ULIP or SIP?

Inflation: A Key Factor to Consider into Retirement Planning

What are the things to consider before buying ULIPs?

Top Investment Options for Retirement Planning

What is the Estimated Return Percentage on ULIP? Do Investors Get Compound Interest?

Retirement Planning Guide: These 5 Steps Will Help You Towards a Safe, Secure and Fun Retirement

What are the Rules for Exit From NPS?

Give Your Retirement Savings A Booster-Shot with Annuities

Do Pension Plans Allow any Death Benefits?

What are the Benefits of ULIP - Explained

8 Charges in ULIP That You Must Know

Top 6 Flexible Benefits That ULIPs Offer

How can NPS help you save tax?

Best Insurance Plans for a Guaranteed Monthly Income After Retirement!

What tax benefits are there on saving for retirement?

How is ULIP NAV calculated? How is the return calculated in ULIP?

Why Should You Invest in NPS?

5 Reasons Why ULIP Plans are One of The Best Retirement Planning Instruments

What are the Charges Levied on ULIP?

Why ULIP Should Be a Part of Your Investment Portfolio?

Is ULIP A Good Investment Option?

Understanding Annuity Plans

How Do Annuity Options Work In NPS

Why Should I Invest in ULIP?

Why are ULIPs One of the Best Tax Saving Instruments?