Retirement Corpus Planning Calculator Online

What Is a Retirement Calculator?

What Is the Formula for Retirement Calculator?

 

The mathematical formula on which the retirement planning calculator functions is: 

FV = PV (1+r)^n.

Before using the retirement calculator in India, look at the following table to understand all the fundamental parameters.

Formula

Parameters

FV = PV (1+r)^n

Future Value (FV), Present Value (PV), Expected Inflation (r), Time to Retirement (n)

How Does a Retirement Planning Calculator Work?

 

Here’s an example which will help you understand how the retirement planning calculator works.

Let’s say this table describes your scenario -

Parameters

Data

Present Age

35 years

Retirement Age

60 years

Required Monthly Income Post-Retirement

₹35,000

Life Expectancy

80

Inflation

6%

Now, let’s say you wish to invest your retirement corpus in a bank FD offering an 8% yield.

So, as per the formula FV = PV (1+r)^n,

FV

Required Annual Income

₹35,000 (1+0.06)^25 = ₹1,50,215.5

₹150215.5 x 12 = ₹18,02,586

As per your life expectancy, your retirement period is 20 years.

FD Yield

Inflation

Inflation Adjusted Rate of Return

8%

6%

(1+0.08)/(1+0.06) - 1 = 0.001575

 

So, the inflation-adjusted rate of return becomes 0.001575.

Retirement Period in Months

PMT

12x20 = 240

₹18,02,586/12 = ₹1,50,215

You can now calculate your retirement corpus in an Excel Calculator using the PV function.

Select the following in the retirement calculator, as shown in the table below.

PMT

1,50,215

NPER

240 months

Type

1

Retirement Corpus

₹3,00,48,832

Therefore, the retirement corpus you need to generate the annual income of ₹18,02,586 is ₹3,00,48,832.

In simpler words, you need to invest ₹3,00,48,832 in your 60th year at a return rate of 8% to get an annual income of ₹18,02,586 for 20 years.

What Are the Benefits of a Retirement Planning Calculator?

Frequently Asked Questions