We all work hard to live a healthy lifestyle and ensure financial security for our loved ones. But as time passes, we have our eyes focused on our retirement goals, be it to travel the world, build our dream home, or spend quality time with our family. In those non-working years, you would want to live a financially independent life, which is only possible when you start with retirement planning timely. This is where a retirement calculator acts as a guiding tool.
In this blog post, we will cover various aspects of a retirement planning calculator to help you plan well for the golden years of life.
What is a Retirement Planning Calculator?
By definition, a retirement calculator is an online tool using which you can calculate the amount you can choose to invest towards a retirement plan. Based on your monthly contribution selection, it will show you an estimate of the lumpsum amount you could save for retirement until you reach the age mark of 60 years (assuming you would want to retire from work life when you turn 60).
In general, an online pension calculator asks for the following details:
- Date of birth
- Expected retirement age
- Current annual salary
- Current saving plan if any
Based on the details you share, an online monthly pension calculator calculates the amount you would need for your retired life and the corresponding monthly investment you should start with from now onwards.
Note: The exact details asked by different retirement calculators may slightly vary from one another.
Why Should You Use a Retirement Planning Calculator in India?
A retirement calculator is a valuable tool using which you can draw a map of your financial plan. It is advantageous for individuals like you in many ways.
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To get an estimate of the pension amount
While battling with the regular expenses and investment plans, you might not know how much money you would require in your retired life as a pension. This can be made simple using an online pension calculator which is meant to help you arrive at the amount you would need in the post-retirement age to maintain your lifestyle.
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To know how much you need to invest regularly
An online retirement planning calculator gives you a clear idea of how much money you should save or invest every month to achieve your retirement goals. Clearly, investing a certain amount every month is highly preferred over saving the same because of the returns you can expect with the right investment decisions.
How to Use a Retirement Planning Calculator?
In general, you need to fill various fields with the right information while using an online retirement planning calculator, like DOB, annual income, and preferred retirement age. Based on the information you provide, the chosen retirement calculator will give you an estimate of the monthly pension you would need after retirement.
Benefits of Retirement Planning
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Knowledge about healthcare expenses needed
With the easy availability of high quality medical care, the average life expectancy in India has increased more than in the past. When you expect to live longer, your healthcare needs and related expenses will also increase. Using our pension calculator, you can plan well for the retired life and gather adequate funds that are sufficient to live a longer life.
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Financial Cushioning for Employer-funded pension
In general, the payouts from the employer- or government-funded pension schemes are not enough to fulfill the post-retirement needs and maintain the current lifestyle. By knowing how much money you would need after retirement, you can create a backup or additional cushion for the existing pension plans you have opted for during your working years.
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Financial Independence
As an independent individual who has always worked hard to maintain a good lifestyle, you would not want to depend on your children or other family members for your entire life after retirement. This is only possible when you follow an effective retirement plan and work on building an adequate corpus for the retired life as suggested by a retirement calculator.
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Financial Support for Family
Like many other individuals, you would want to provide for your loved ones at major life events even after you have retired. This will require you to have enough retirement funds by your side.
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Pursuit of Interests
If you have kept aside certain dreams and interests for your retired life, there are two things you would need to fulfill them all – freedom from workplace responsibilities and funds for retirement. Other than using a pension calculator, you can ask for help from a professional financial planner to follow the most suitable retirement plan.
Conclusion
Your post-retirement life will be the golden period when you can pursue what you love to do. Careful planning for retirement is indeed needed to fulfill all your desires in those years of life. You can start with the process by learning how to calculate a retirement corpus using a retirement planning calculator. Also, continue exploring BimaBandhu to understand various important aspects of life, such as investments and insurance purchases.
FAQs
How is pension calculated?
You can use a monthly pension calculator available online for this requirement.
What do you mean by a retirement plan?
A retirement or pension plan is the one that you can follow or invest in to ensure a constant flow of regular income every month after retirement. This requires contribution into the right plans during the working years of your life.
How much money will I need after retirement?
The final amount of money needed to retire may differ from one person to another. You can get a better idea by calculating your future expenses, making post-retirement plans, and considering unforeseen expenses that may crop up in old age.
