Close
Close

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term

Protect Your family’s financial future with Kotak e-Term. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Lifetime Income Plan

Retirement years are the golden years of life. Know more

Close

Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

Calculating a Retirement Corpus that can Support Your Lifestyle

Calculating your retirement corpus is the first step of retirement planning. It requires you to make some educated guesses, based on which your retirement corpus can vary. Visit now to know!

  • Dec 15, 2021
  • 1,533 Views

A retirement plan can prove fruitful for you only if it can accumulate a sufficient corpus that helps you maintain the desired lifestyle post-retirement. In this write-up, we discuss the various factors that can help you efficiently estimate the corpus amount you would need in the future.

Mr Srikant, who retired recently, bought a retirement plan suggested by a colleague while he was still employed. Now, after his retirement, the same plan is paying him a pension of Rs. 2000 a month, which is insufficient in supporting his post-retirement life. It happened because Mr Srikant was ignorant that calculating the future corpus requirement is crucial before buying a retirement or pension plan.

Various factors can help you in the corpus estimation, without which the retirement plan may fail to support you significantly. Once the corpus is estimated, it would give you an idea of how much you need to invest during the accumulation phase so that the desired amount is available by the time the vesting stage starts.

Factors Affecting the Retirement Corpus

  • Years Left for Retirement:

 It refers to the number of years from starting of the retirement plan to the year of retirement and can be calculated as a difference between your current age and age at the time of retirement. The higher the number of years left for retirement, the easier it is to build a large corpus.

  •  Life Expectancy:

It refers to the number of years a person is expected to survive. This factor is crucial because the corpus is expected to serve you till you are alive.

  • Current Monthly Expenditure:

It will help you estimate the desired amount for meeting your usual expenditure post-retirement after considering the expected inflation.

  •  Inflation Rate:

With inflation, everything will get costlier year by year, and hence your retirement corpus must align with expenses that would increase manifolds by the time you retire. Also, the inflation rate during your post-retirement years must be considered for better planning.

  • Expected Return on Investment:

It is the percentage of return you expect your investment to generate since you would have to fluctuate your premium amount for the selected term, as per the expected returns.

  • Calculation of the Retirement Corpus:

To calculate the corpus, it is better to use the online  retirement corpus calculator to generate accurate results. It takes as an input the above factors and generates the required corpus and the monthly investment. For understanding how the calculator works, you can refer to the following step-wise calculation:

Monthly expenditure at the time of retirement (ME)

ME = CME * (1+r)^n

Where CME = current monthly expenses

r = Annual inflation during the accumulation phase

n = years before retirement

Annual expenditure at the time of retirement (AE)

AE = ME * 12

Required Corpus (C)

>C = AE*((1-((1+G)/(1+R))^N)/(R-G))

Where G = Annual inflation expected post-retirement
R = rate of return post-retirement
N = Life expectancy post-retirement

The Final Word

Calculating the corpus, you would require after retirement is the first step towards truly securing your retirement years. Once you know your requirement, selecting a plan that can benefit you in your later years is easier.

In this policy, the investment risk in the investment portfolio is borne by the policyholder.

Kotak e-Invest

Download Brochure

Features

  • Return of Mortality Charges*$
  • Enhanced Protection
  • Multiple Plan Options
  • Zero Premium Allocation Charges
  • Tax Savings^

Ref. No. KLI/22-23/E-BB/521

T&C

- A Consumer Education Initiative series by Kotak Life

Similar Articles

Invest for your second innings with a guaranteed savings plan

Benefits of Early Retirement Plans

5 Common ULIP Myths That You Should Stop Believing

What is Fund Value in ULIP?

How Does Pension Plans in India Works?

Is it possible to live a financially independent life, even after you retire?

Why ULIP Should Be a Part of Your Investment Portfolio?

Is It Worth Buying ULIP Plans For 10 Years?

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

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

What is Partial Withdrawal in ULIPs?

ULIP Plan or Traditional Insurance Plans - Which is better?

Long Term Investment Guide for Your Retirement

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

A Beginner's Guide to Understanding 401k Retirement Plan

Top 6 Reasons Why You Should Get A Pension Plan

Save Early to Keep Living Your Dreams Post Retirement

What are the things to consider before buying ULIPs?

Retirement planning with a systematic life insurance plan

How Does NPS Work?

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

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

How to Win at Retirement Savings?

Pros and Cons of Retirement Annuities

Retirement Planning at 50? You Are Still Good to Go

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

How Has NPS Performed in Comparison with Other Instruments?

Know Why You Should Stay Invested in Your ULIP Plan

What is the Minimum Lock-in Period for ULIP?

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

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

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

Why Should You Invest in NPS?

What are the Instruments Available for Building a Retirement Corpus?

Importance of Retirement Planning

Understanding Annuity Plans

How has ULIP Grown Over the Last 3 years?

Terminologies You Should Understand About Retirement Plans

What is a Defined Benefit Plan and How it Works?

How To Make Most of Your Money After Retirement?

How Does ULIP Work in India?

Demystifying the Retirement Planning Process

Best Insurance Plans for a Guaranteed Monthly Income After Retirement!

The Significance of Number 8,000 in Retirement Planning

At What Age Should You Start Your Retirement Planning?

What are the Rules for Exit From NPS?

Why You Should Invest In An Annuity Plan?

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

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

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

Which Pension Plan Suits You best?

FAQs on Taxation of ULIPs

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

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

What Are Superannuation Benefits?

EPF Grievance Management: All You Need to Know

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

What are the Charges Levied on ULIP?

Are Annuities Great For Early Retirement?

यूलिप में 8 शुल्क जो आपको अवश्य जानना चाहिए

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

What is the difference between Life Insurance and ULIP?

How should one decide on fund allocation within NPS?

Top Investment Options for Retirement Planning

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

5 Reasons to Buy ULIP for a Secured Financial Future

Types of Pension Plans for Your Retirement

What is Lock-In Period in ULIPs?

Is ULIP Better Than FD?

यूलिप और उनके प्रकार क्या हैं?

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

Top 4 Myths About ULIP Investments You Should Know

How To Choose The Right Pension Plan?

7 Secrets that can Make Your Post-Retirement Phase Prosperous

What are the Benefits of ULIP - Explained

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

Inflation: A Key Factor to Consider into Retirement Planning

Importance of financial Planning for Retirement

What tax benefits are there on saving for retirement?

Is ULIP a Complex Financial Product?

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

What Are Retirement Pension Plans?

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

Retirement Planning Guide for Working Men and Women

Benefits Of Retirement & How Investments Can Help You Enjoy Them

Important Questions To Ask Yourself Before Choosing A Good Retirement Plan

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

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

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

How Much Corpus Does One Need for Retirement?

How can NPS help you save tax?

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

Different Types of ULIP Investments in India

NPS for Housewife

Ten Signs That You're Ready to Retire

Retirement Planning for Millennials

ELSS vs ULIP: Which is a Better Investment?

5 Steps to Gift a Smart Retirement Plan to Your Parents

How to Maximize Your Retirement Savings with a Pension Scheme in India

What are Fixed Maturity Plans and Why Should I Invest in Them?

How Do Annuity Options Work In NPS

Benefits of Early Retirement Planning in India

How Safe is it to Invest in ULIP plans?

Meaning of Sum Assured in a ULIP

Do ULIPs Give Good Returns On Investments?

Un-Retirement - Are You Ready For It?

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

Top 6 Flexible Benefits That ULIPs Offer

How Can I Achieve My Wealth Goal with ULIP Investment?

What is a Retirement Plan - What are its Features?

Retirement: A New Start to Life!

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

What are the Uses of ULIP?

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

What is an Annuity Plan, and How Does Annuity Plan Work?

Do Pension Plans Allow any Death Benefits?

Different Types of Retirement Schemes

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

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

Saving for approaching retirement with retirement insurance

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

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

How To Keep Your Retirement Accounts from Being Hacked?

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

Give Your Retirement Savings A Booster-Shot with Annuities

Top 4 Mistakes To Avoid While Planning For Your Retirement

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

Advantages of Pension Schemes and Retirement Plans

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

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

5 Notable Investment Options for Retirees

Tips to invest your voluntary retirement scheme money

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

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

What Are Mortality Charges In ULIP?

Retirement Planning: Use our Retirement Calculator to Plan Ahead

What are ULIPs and their Types?

What are the Differences Between ELSS ULIP and Mutual Funds?

What Happens to ULIP Premiums Paid if the Market Crashes?

Types of Retirement Plans

Which Is Better: ULIP or SIP?

Is ULIP a Good Option for People Above 60?

Can I Surrender My ULIP Policy after 2 Years?

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

A Quick Guide to Retirement Plans

Is ULIP A Good Investment Option?

Can NRIs Invest in ULIP Plans Offered in India?