Retirement Calculator

What is a Retirement Planning Calculator?

A retirement planning calculator is a free, user-friendly online financial tool that allows you to calculate the amount of money you’ll need during your retirement. It helps you prepare for the future by assisting you in planning your retirement fund.

With this, you can compute the retirement fund you’ll need to maintain your current standard of living. 

The calculator requires you to input your current age, your intended retirement age, your life expectancy, current monthly expenses, current accumulated corpus, inflation, etc. Based on this, it calculates your total investment and expected gains. 

This convenient financial tool takes the guesswork out of retirement planning. It helps you learn how much you need to save monthly or annually and how much post-retirement income you need to get the corpus you want, making your retirement planning journey a lot easier.

How Does Moneyfy's Retirement Planning Calculator Help You?

Here’s how the easy-to-use free Moneyfy’s retirement planning calculator helps you:

1. It allows you to factor in key considerations such as retirement age, savings, life expectancy, expected investment return, and your desired post-retirement lifestyle into your retirement fund calculations to make informed financial plans.

2. It assists you in calculating attainable savings objectives based on your planned retirement expenses. It helps you learn how much you need to save today to realise your future retirement goals.

3. It helps estimate retirement income from sources such as annuities, pensions, etc. It can calculate the amount of money you might receive from different sources, helping you plan for your post-retirement future efficiently.

4. With a retirement calculator, you can factor in an essential consideration of inflation, allowing you to calculate your retirement fund accurately.

How Does a Retirement Calculator Work?

A retirement planning calculator tells you exactly how much money you will need at retirement to maintain your current lifestyle.

Here's how it works:

• Enter details like your age, monthly income, life expectancy, estimated returns, and estimated inflation rate.

• The tool uses this information to calculate your total investment need and projected future value.

• Once the calculation is done, you can see your required corpus, monthly and annual income targets, and suggested savings rate.

You can use this retirement calculation formula to calculate your estimated retirement corpus:

FV = PV (1+r)n

Where, FV = Future value

PV = Present value

r = Expected inflation

n = Time left until retirement (retirement age-current age)

Example:

Let's say the present value is Rs 35,000. That is the amount you need to lead a comfortable life today. Additionally, your expected inflation rate is 6%, and you're currently 35 years old and plan to retire at 60. That makes 'n' (60-35) 25 years. 

Adding the values to the formula, you get:

FV = 35,000 (1+0.06)^25

This will come to Rs 1,50,215.5. Since this is currently a monthly figure, let's multiply it by 12 to gain an annual figure of Rs 18,02,586. And so, the annual income you need once you retire is Rs 18,02,586.

As you can see, this calculation is complex and can be prone to errors if done manually. Hence, consider using Moneyfy's instant retirement calculator to gain accurate insight for sound retirement planning.

How to use Tata Moneyfy Retirement Calculator?

Using the Tata Moneyfy retirement calculator is a simple and straightforward process. Follow these steps to know how much you need to save and what your post-retirement income will look like:

Step 1: Open the calculator

Visit Tata Capital Moneyfy's official website or download the mobile app and navigate to the 'Calculators' tab. Here, click on 'Retirement Calculator.'

Step 2: Enter your current age

Type in your age in years. This tells the calculator how many years you have until retirement.

Step 3: Enter your planned retirement age

Enter the age when you wish to retire (e.g., 60). The tool will use this to calculate your investment horizon.

Step 4: Choose your life expectancy

Select a realistic life span (e.g., 85 or 90). This defines how long your retirement corpus must last.

Step 5: Define your current monthly expenses

Type in the amount you spend each month today (for example, Rs. 50,000). The calculator uses this figure to determine the cost of maintaining your current lifestyle in retirement.

Step 6: Enter your current accumulated corpus

Add up all your existing retirement savings, such as PPF, EPF, Provident Fund, and mutual funds, and enter the total amount. This reduces the gap you need to fill with fresh investments.

Step 7: Specify ROI pre and post-retirement

Enter a more conservative return rate for your corpus once you retire, along with your existing ROI.

Step 8: Enter the expected inflation rate

Type in the annual inflation rate. Adjusting for inflation ensures your future purchasing power remains intact.

Step 9: Click on 'Calculate'

Once you' have entered all the details, click 'Calculate.' The calculator will give you all the details like your total investment, expected gains, annual expense at retirement, and total corpus required at retirement.

Advantages of Using Moneyfy's Retirement Calculator

A retirement calculator is a convenient tool that can help you plan for your future confidently. Here are its benefits:

• A retirement calculator helps you understand your financial situation comprehensively. It factors in your age, income, inflation, savings, etc., allowing you to gain a holistic picture of your current and projected financial status.
   

• A retirement calculator helps plan ahead by factoring in your post-retirement goals to help you calculate how much your current investments and savings can cover your retirement expenses.
   

• You can use the calculator to try various 'What-ifs' by tweaking the retirement age, current accumulated corpus, etc. It helps you gain increased control over your financial future by helping you gauge how your choices can influence your post-retirement plans.
   

• A retirement calculator helps you analyse and manage savings and investment-related risks by offering a quantitative measure for them.