Investment Plans 227 views January 22, 2022

In your late years, you don’t want to worry about the day-to-day expenses. So, have you started planning for it? If not, you should because inflation can pull you down if you don’t start investing now. But how much will you need to live a comfortable life after retirement? Use the Retirement Planning Calculator that helps you know the same. The tool estimates your financial future based on your current income, expenses, savings, investments, etc. Let’s check here how the Retirement Planning Calculator works.

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Working of the Retirement Planning Calculator

The calculator works when you enter the following information –

  • Current Age
  • Desired Retirement Age
  • Life Expectancy
  • Monthly Income During Retirement Years
  • Expected Inflation Rate (6-8%)
  • Expected Return Pre and Post-Retirement Investment
  • Existing Saving or Investment for Retirement

How do These Factors Affect Your Retirement?

Current Age – It tells how far you are from retirement and the amount you need after you retire.

Retirement Age – By this, the calculator knows when you’ll need money when the income stops.

Life Expectancy – Helps know the estimated age for which you’ll be alive
Income Required During the Retirement Years – The calculator asks you to enter the amount that you’ll need when you retire.

Inflation Rate – The year-on-year rise in the expenses

Return from the Pre and Post-Retirement Investment – You need to enter the return you can expect to receive before and after retirement.

Savings or Investment – Enter the amount that you have saved till your current age.

Benefits of Retirement Planning Calculator

The retirement planning calculator comes with the following benefits –

Easy to Use – It’s a simple tool where you can get to know by entering a few variables such as your current age, life expectancy, expected return rate on your investments, etc.

Time-saving Tool – Within a few seconds, you get to know the corpus you need for a happy retirement life, unlike the manual calculation fraught with complications.

Helps Plan Your Investments Smartly – With a figure in sight, you can plan where you should invest to get the same over time. While equity returns can be in good double digits, fixed income instruments bear around 7-8% at best. So, you can allocate your investments accordingly.

Available Online – You can access the Retirement Planning Calculator online. Insurance companies keep the same on their website.

Shall You Trust Equities to Build Your Retirement Corpus?

Here, you will invest your money in company shares. And this is a better investment option for those who are aware of the market up and down. And if you’re new to this, you can buy equity shares of a company with the help of a fund manager who will allocate your money intelligently across Stocks using his market insights. Stocks can be of the following types –

Large-cap – Stocks of top 100 companies according to market capitalization

Mid-cap – Stocks of top 101-500 companies according to market capitalization

Small-cap – Stocks of companies that come after the top 500 according to market capitalization

How to Invest in Equities?

There are two ways by which you can put your money in equity –

Direct – You can open a Demat Account and invest in the stock market

Or

In-Direct – You can approach a financial advisor who will buy funds for you

Mutual Fund

Here, you need to compare the performance of funds over the years and select the one that has performed consistently. The rest will be taken care of by your fund manager.

Unit-Linked Insurance

In this, the insurance company will offer you options of funds wherein you can invest your money. And here also, you just need to choose the fund and the same will be managed by a fund manager. But in addition to that, you’ll get a life cover. So in case of your death, your nominee will get the predetermined amount.

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