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Retirement Corpus Planning Calculator Online

An online retirement planning calculator shows the retirement corpus that you need to generate, taking certain parameters into consideration. Accordingly, you can plan your investments to build the desired corpus with a retirement planning calculator in India.

What Is a Retirement Calculator?

An online retirement calculator is a utility tool that computes the amount of money you need post-retirement in order to maintain your current lifestyle. The calculations are based on assumptions like the retirement period and the expected rate of inflation.

Let’s look into the functioning of this calculator in detail.

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?

An online retirement calculator has several benefits. It helps you to -

Figure out how much you need to save monthly to retire with a large corpus at the end of your professional career.
Determine the specific investment opportunities you need to consider.
Compare the various retirement options and plans.
Save time with a few simple clicks.

Now that you are aware of the working, usage, and benefits of a retirement calculator, it is time you use one to ensure a financially secure future!