# Retirement Corpus Planning Calculator Online

## 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

 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.