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For someone in the 20s, planning for retirement is definitely not on the financial planning list. We dream of owning a home or a car, but we seldom think about retirement. Experts suggest one should start saving for the second innings of your life from the time you start working.If you think of retirement planning, you should have a goal. You need to know how much money you need for that phase, what will your retirement expenses and at what age you plan to retire. The above pointers can serve as goalposts to help you make a plan so that you can still enjoy the same lifestyle as it is today. Keep in mind that as you step into different milestones of life such as marriage, kids, job change; your financial circumstances also change and ultimately your retirement planning.With a plan in place, you will be equipped to cover daily living expenses, fight inflation, manage medical emergencies, and meet your retirement goals (exploring hobbies, travelling etc.). To begin with planning:
- You should decide your retirement age
- Start saving early
- Determine your retirement corpus
- Calculate the future value of savings
- Reduce unnecessary expenses
- Create an investment portfolio with the help of a planner
- Monitor your plans regularly
Of all the things listed above, estimating corpus for retirement can be tough to do. The manual calculation can result in unnecessary errors. Moreover, it can be time-consuming. However, if you use the retirement calculator , it will give you an accurate figure. To use this, you only need to input the detail for pre-templated questions, and you will come to know how much money you should save for retirement. You should be honest with your answers; else, it won’t serve the purpose. Following are some of the benefits of the online calculator:
- It is an online tool available free of cost
- Helps to draw a financial plan based on the goal
- You get results in minutes, without any errors
- You can know how far you’re from reaching your retirement goal
- It helps to inculcate a habit of savings
If you’re struggling to calculate retirement-related planning; you can use the following calculators:
- Cost of living – Retirement Calculator Once you retire, your financial situation will not be the same when you were employed. In order to have the same lifestyle as the current one, you should have an idea about retirement expenses. With Cost of Living – Retirement Calculator, you will get to know the exact cost of living for the post-retirement phase. It allows you to compare your pre-retirement and post-retirement life, so as you get to know how much money you should save.To arrive at a figure, the online tool asks for salary, social security benefits, dividends earned from stocks, interest on saving account, house rent, loans, taxes, cost of education, entertainment and recreation cost and others.
- Retirement Savings Calculator The calculator will let you know how much savings you need for a comfortable retired life. You can decide whether your current investment options will be sufficient to reach the savings goal. For such calculator, you will have to enter details such as current age, existing annual income, spouse’s income (if the person is working), existing annual savings, balance savings for retirement, retirement age and pension benefits on retirement.
- Savings Plan Calculator It is recommended that you should start saving for retirement from an early age. When you are young (most often in the 20s), you have plenty of time in hands to accumulate wealth for the future. It will also help you lead a comfortable retired life. Using the Savings Plan Calculator, you get an estimate of how much you would be able to accumulate until the retirement age.In short, the online tool proves that the more you delay saving for retirement, the less you tend to accumulate. The Savings Plan Calculator asks for data such as current age, expected age of retirement, increase or decrease in annual income, expected return on savings tax, savings frequency and marginal tax benefit.
- Investment Return Calculator To estimate your investment returns, you must consider taxes and inflation rate. These two factors directly have an impact on your returns. The calculator works on assumptions relating to the rate of inflation, tax return on savings, marginal tax bracket, and so on. Using investment return calculator, you can figure out a realistic income for the future. This will help you to plan retirement accordingly.
To sum it up To plan for retirement, you should consider all aspects right from your income, expenses, emergencies, travel and so on. Using a retirement calculator, you can set up a plan which will fulfil all your retirement goals. Besides, if you are failing to save enough, the online tool also suggests investment plans as per your savings plan.Are you ready to use the retirement calculator?
DISCLAIMER
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.