Annual Income Required Immediately After Retirement
Additional Income required for retirement
Amount you need to save monthly to retire
What Is a Retirement Calculator?
Planning for retirement is a crucial financial goal, and a retirement calculator can be a valuable tool to help you assess your financial readiness. By inputting various factors such as expenses, savings, and investment returns, an online retirement calculator provides an estimate of how much an individual needs to save to build a sizable corpus for retirement.
Angel One’s retirement calculator helps you weigh multiple investment routes by allowing you to visualise how much you will accumulate under different circumstances. You can try the tool as many times as you want, free of charge, with different variables until you find a satisfactory answer.
How Does a Retirement Calculator Work?
The online retirement calculator is a user-friendly tool. It takes into account your current age, retirement age, monthly expenditure, life expectancy, expected returns on investments and rate of inflation, existing savings etc., to calculate the money you will need to retire.
The calculator uses the data provided by you to calculate how much you should invest monthly for a large sum of money under different savings schemes, so you can make an informed decision.
It is important to understand that the calculator uses the current economic conditions for calculation, such as the inflation rate, which might change. However, it is a good place to start and gives you a fair idea of how to plan for the future.
What Is the Retirement Calculator Formula?
The retirement calculator estimates the amount you will require when you retire and the monthly contribution you should make to accumulate the corpus. The Angel One retirement calculator formula is also the same.
- The formula of the retirement calculator is based on the future value formula:
- FV = PV (1+r)^n
- FV= future value
- PV= Present value
- r= expected interest rate
- n= years till retirement ( retirement age - current age)
That being said, the actual formula is more complex and is based on current age, retirement age, monthly expenditure, life expectancy, existing savings, expected returns on investments, and rate of inflation.
How to Use an Online Retirement Calculator
The online calculator simplifies your life by solving complex math problems instantly. To calculate the results, you must input a few variables into the calculator, such as your current age, monthly expenses, expected lifestyle in the future, etc.
Here are the steps to using the Angel One retirement calculator.
- Visit the online Angel One retirement calculator page
- Enter your current age, retirement age, monthly expenditure, life expectancy, existing savings, expected returns on investments, and rate of inflation.
The calculator will display the projected values: the total corpus you need and the monthly savings you must make to get that amount. The calculator uses the compounding interest formula to determine the total amount you will accumulate if you make the investments until maturity.
Let’s assume the following details:
|Total Monthly Expense
|Current Age in Years
|Retirement Age in Years
|Average Life Expectancy in Years
|Average Inflation Rate
|Existing Investment for Retirement (PPF)
|ROI (Return on Investment)
*The table values are only for representation purposes.
According to the data above, the user had 17 years of employment before retirement plus 10 years post-retirement. The calculator estimates the required savings and post-retirement corpus at Rs. 4,200 and Rs. 1,34,93,138, respectively.
Benefits of Using Retirement Calculator
These are some of the benefits you can unlock using the Angel One retirement calculator.
- Reliable: The retirement calculator is a reliable tool that helps you compute accurate results, eliminating the chances of making mistakes in manual calculation.
- Financial planning: It is helpful for financial planning by allowing you to compute the total savings you need for your retirement. You can use the tool to compare investment strategies before finalising your course of action.
- Gives clarity: An online retirement calculator comes in particularly handy when you have special plans to make for the future. If you have a high-value plan post-retirement, like an international vacation, the calculator will help you save accordingly.
- Time saver: These online tools are designed to save time, especially when you need a quick solution. These calculators operate based on simple user inputs like current age, present monthly expenses etc.
- User-friendly: These calculators are user-friendly and have a simple user interface. You don't require special knowledge or training to use the Angel One retirement calculator.
- Standardised formula: The calculator uses the standard compounding interest formula for calculation. Hence, the results are universal and unbiased.
- Available for free: The tool is available free of charge for anyone to use. You can access the calculator from anywhere—from your home or office—using the internet. You can also use it as many times as you need.
How to Maximise Retirement Savings
These are some tips to maximise your retirement savings and continue enjoying financial independence post-retirement.
- Start today, as the earlier you start, the better. You can enjoy more growth through compounding interest.
- Increase your savings with the increase in your income to gradually build a significant corpus without stressing your finances.
- Invest in retirement funds like PPF and NPS. These funds focus specifically on helping subscribers build retirement funds.
- Practice savings - Set aside a fund for your retirement with each salary.
- Save for health expenses separately for your sunset years.
Retirement Calculator FAQs
What is a retirement calculator?
A retirement calculator is an online tool that calculates the amount you will need for retirement and the monthly savings you require to achieve that amount.
What is the ideal amount I need for retirement?
The ideal amount will depend on your financial condition, future lifestyle, and financial liabilities. Considering all these factors, you can calculate the amount you need.
How do I use an online retirement calculator?
The online calculator is easy to use. Here are the steps.
- Open the retirement calculator on Angel One’s website.
- Enter your current age, retirement age, monthly expenditure, life expectancy, existing savings, expected returns on investments and rate of inflation,
What are some of the best investment avenues for retirement planning?
These are some of the best options.
- Mutual funds
- National Pension Scheme
- Public Provident Fund (PPF)
- Atal Pension Yojana
Can I retire with Rs. 2.5 crore in India?
Rs. 2.5 crore may be a decent amount under the current market scenario. However, it is important to note the future inflation rate, which will continue to rise. The Angel One retirement calculator gives a very good projection of the amount you will need to retire given your current age and expenses and the amount you must invest under different investment avenues to receive the desired return.