Calculate how much you need to grow your wealth to ensure a smooth and hassle free post retirement life with HDFC Life's Retirement Planning and Pension Calculator.
Benefits of Retirement Calculator
Retirement calculators are handy tools that help you plan your finances for a hassle-free retired life. Here’s a look at all the benefits of using a retirement calculator:
Helps You Plan Your Finances
The most important function of the calculator is to tell you how much you need to save up for your retirement. It will tell you if your current plans are falling short, so you can take corrective measures to secure your future.
Provides Financial Clarity
If you already have a retirement plan in place, the calculator can help you gain clarity on how much you could end up with when you retire. Once you input the relevant details, it will let you know what kind of monthly income you could enjoy in your golden years.
You Can Compare Your Options
You can use the online calculator to understand what kind of retirement corpus different plans will offer you. You can then choose the kind of retirement plan that best suits your financial needs.
Free & Easy to Use
The retirement calculator is a simple tool to use. It doesn’t require any technical knowledge. It’s also free. Once you input the details, it will instantly show you how much you need to save up for your retirement.
How Much to Save Up for Retirement
Generally speaking, working individuals are advised to save 10-15% of their pre-tax income to put away in retirement plans. This is a good place to start, but it may not be enough for your retired life. Understanding how much to save up for retirement can be tricky. First, you must keep track of your current outgoings. This includes your monthly living expenses as well as other leisure or medical expenses. You should then adjust this for your retired years. Your expenditure may reduce to 75% of what it is now. Once you understand how much these things cost you today, you can use an approximate rate of inflation and your life expectancy to understand the amount you will need to live a comfortable and hassle-free retired life.
A retirement calculator is a simple tool that allows you to figure out how much money you will need after you retire from paid, active work.
The retirement calculator takes personal details like age and desired retirement age, details of current income, savings and investments, and expenses. Based on these details, it calculates how much money you will need to grow your wealth for a hassle-free post-retirement life.
The pension calculator then helps you choose the right pension plan you can start investing in towards meeting your financial goals post retirement.
Pension is calculated on the basis of an estimate of expenses you will incur on a regular basis once you retire from paid work.
An online retirement calculator takes into consideration age, expected retirement age, current income and savings details. This enables it to get an estimate of the savings you will tote up once you opt for retirement. It will also be able to tell you whether it will be enough to cover your expenses in your golden years.
Based on these details, the online pension plan calculator will make an assessment about your estimated monthly expenses after your retirement.
You are entitled to a fixed pension if you are a government employee. People working in private organisations and making PF contributions are eligible for pension under the Employees' Pension Scheme (EPS) on fulfilment of some terms and conditions.
In all other cases, you need to provide for your own pension after retirement. This can be done by investing in a pension plan while still working. The amount of pension you get after retirement will depend upon the amount you invest in the pension plan regularly, among other factors.
The amount of money needed to retire differs from person to person.
You can know how much money you will need to retire by -
- Calculating how much your expenses will be once you retire
- Your post retirement plans like traveling around the world or taking up a sport, a hobby etc
- The number of dependents on you whom you need to support financially
- Unforeseen expenses that can crop up in old age
The money you need to retire is a corpus that takes care of regular needs plus unforeseen expenses.
The factors you should consider when planning for retirement are -
- Identify your financial and retirement goals
- Correctly assess your current financial situation
- Plan a sound investment allocation strategy
- Take factors like longevity, inflation and unforeseen medical expenses into consideration
Taking these factors into account, you can then decide the age you should retire. Early retirement is a desirable goal, but it can be achieved only if you have invested and saved substantially during the early part of your career.
The amount of money you will need on a regular basis for your daily livings costs plus unforeseen costs and costs incurred on luxuries should constitute your retirement corpus.
To estimate your retirement corpus
- Draw up a list of your total expenses you currently incur
- Identify goals post retirement
- Make provision for a healthcare budget
- Make an estimate of your expected income after retirement – this can include pension under EPS, income from fixed deposits etc.
You can either do all this manually, or can do it in a simpler way with the aid of an online retirement calculator.
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Retirement, for all working individuals, is inevitable. Today, you could be a committed professional, working hard to meet your professional commitments, and soon you would be the cynosure of all eyes in your farewell party. Yes, time flies, and life goes on! Irrespective of the nature of your profession, you will have to retire one day, typically at the age of 60.
Tax Benefit of Various Pension Plan
Your life after retirement should be as comfortable as it was while you were still working. However, that will only happen if you spend some time planning the financial security of your future. A steady flow of income even after you have hit the retirement milestone will allow you to sustain the same lifestyle without making any compromises.
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