Retirement Calculator
Estimate how much will you need when you retire
What is a Retirement Calculator?
A retirement calculator is an online tool that helps you determine how much money you will need to cover your retirement needs. It considers key factors such as your current age, desired retirement age, monthly expenses, inflation rate and expected investment returns.
Using these details, it provides a realistic picture of the retirement corpus you will need and how much you should save or invest regularly to reach that goal. The calculator is quick, easy to use and gives accurate results to help you plan for the future.
How does the retirement calculator work?
A retirement planning calculator helps you estimate how much money you will need after you retire. It takes into account several key factors such as your current age, retirement age, expected inflation rate, life expectancy, expected return on investment and current monthly expenses. Using these details, it calculates the total retirement corpus you will need and how much you should invest regularly to reach that goal.
For example, let's say:
is 25
is 80
at 65
inflation rate is 6%
on investment is
10%
monthly expenses
are ₹ 30,000
investment is 10%
rate is 6%
are ₹ 30,000
Why is retirement planning important?
Retirement planning is important to make sure you have enough funds to meet your needs after you retire. It prepares you for the future and helps you save for specific retirement goals like healthcare, housing, travel, and more.
Planning for retirement ensures you are not caught off guard when the time comes. It allows you to build your savings slowly over the years so you can enjoy a comfortable and stress-free retirement.
What are the Benefits of using an Online Retirement Calculator?
What are the Benefits of using an Online Retirement Calculator?
Precise Estimates
A retirement calculator provides an estimate of how much you need to save for your retirement, helping you plan effectively and avoid financial shortfalls later.
Why is retirement planning important at different stages of life?
How does a Retirement Calculator help in Planning your Retirement?
Benefits of using retirement calculator
Using a retirement calculator helps in planning for life post-retirement.
You can assess how much post-retirement income will be enough to maintain
your present lifestyle.
Using a retirement calculator helps in planning for life post-retirement. You can assess how much post- retirement income will be enough to maintain your present lifestyle.
Provides financial clarity on how much income you will have post-retirement.
Helps you consider the effects of inflation and compare different yields earned through varying interest rates.
You can see how much corpus you can earn at 4%, 6%, or 8% rates per year and compare the returns yielded by different retirement plans.
3 Quick steps for Retirement Planning
Before you use a retirement calculating tool, you need to first assess some factors at your end. To simplify the process, follow this quick 3-step approach:
Note down your present monthly or yearly expenses. Add everything you spend your money towards – groceries, bills, utilities, loan repayments, and so on. Keep this amount aside. Note down how much you save. Now, envision how much you will spend on these expenses once you have retired.
Once you have an approximate amount, multiply it with the inflation rate during your retirement age. Let’s say, the inflation rate will be 6%. So, the additional post-retirement expenses in the next year would be = annual expenses x inflation rate (6%). Let’s put this in numbers to explain this a bit better.
Let’s say you retire at 60. The average life expectancy rate at birth in urban India is 72.6 *. Now, let’s say your annual expenses at age 60 are ₹ 4 lakh per year. With inflation, they will keep increasing each year. So, from the age of 60 till age 72, assuming a 6% rate of inflation, your annual expenses will look like:
| Age | 60 | 61 | 62 | 63 | 64 | 65 | 66 | 67 | 68 | 69 | 70 | 71 | 72 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Annual expenses | 4,00,000 | 4,24,000 | 4,49,440 | 4,76,460 | 5,01,991 | 5,35,290 | 5,67,408 | 6,01,452 | 6,37,439 | 6,75,792 | 7,16,339 | 7,59,319 | 8,04,879 |
| Assumed Inflation at 6% | 24000 | 25,400 | 26,966 | 28,584 | 30,299 | 32,117 | 34,044 | 36,087 | 38,252 | 40,547 | 42,980 | 45,559 | 48,293 |
| Total money accounting for inflation needed next year | 4,24,000 | 4,49,440 | 4,76,460 | 5,01,991 | 5,35,290 | 5,67,408 | 6,01,452 | 6,37,439 | 6,75,792 | 7,16,339 | 7,59,319 | 8,04,879 | 8,53,171 |
3 simple steps to use ICICI Prudential's retirement calculator tool
Once you have a rough idea of how much post-retirement income you will get, you
can assess how much you should set aside to invest in a retirement plan.
Here is where the retirement calculating tool will help you.
