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Get Ready for Retirement – Use Free Retirement Planner to Calculate Cost of Retirement

November 17, 2017

We are sure you will agree when I say that life is one hell of a heart-thumbing ride, full of swings and swirls, and ups and downs. It is uncertain and one simply can’t predict what’s going to happen the very next moment. But there are a few things in life that are always certain and one of such things is retirement.

Once you age and physically weak, you won’t be able to carry on with your work life and will look for spending time with your family and loved ones. This phase of life is called the post retirement life. But here’s the deal – you need to have a good amount of savings to fall back on if you actually wish to lead a good, healthy and happy post-retirement life.

But the sad reality is that a large number of people do not really care about retirement planning, until it’s too late. Resultantly, they are not able to achieve their post retirement goals and often left with meagre savings to survive after their retirement. Some of them are even forced to work even after their retirement to bring bread for their loved ones.

Here’s the BIG QUESTION?

Why do people not plan their retirement well in advance?

Well, there could be many reasons for it. For starters, people are too busy to think about their retirement. For another, they find it too confusing and dumbfounding to plan their retirement. However, it makes sense to plan for your retirement early.

You’ll be surprised to know that the Internet swarms with a host of free resources such as pension calculator to calculate your retirement corpus and retirement planners to help you plan your retirement without having to burn midnight oil.

These pension calculators and retirement planners are really important as they help you understand the amount that you will need to:

  • Survive during post-retirement phase.
  • Cover your post-retirement lifestyle expenses.
  • Cover your medical and healthcare expenses.
  • Cater for the hubbies you want to pursue after retirement.
  • Cater for important milestones in your post-retirement life.

But ask any finance expert and they will tell you that calculation of retirement corpus is a little tricky. It is not a simple 2+2 calculation and requires a lot to be considered beforehand. But as discussed earlier, retirement planning is important and this is where financial planners and pension calculators come to your rescue. However, to help you use a pension calculator or a financial planner, we are listing below some easy steps. We are sure this step-by-step guide will help you calculate your retirement corpus fairly easily.

  1. First Step: Factor in your Expenses per Month

In order to make an estimate of how much you would need each month for your lifestyle expenses, you will need to carefully find out your current monthly expenses. Then, simply multiply your monthly expenses to arrive at the annual household expenses for you.

  1. Second Step: Find Out Future Expenses per Year

To arrive at the future expenses that you will incur per year, you will need to make an assumption of the future inflation rate, number of years until you retire and your life expectancy. Now, with these information in hand, you will be able to calculate your future annual expenses using the retirement calculator.

  1. ThirdStep: Analyse the Amount of Retirement Corpus

To calculate the amount of retirement corpus, you will need after your retirement; you will need to factor in the assumed inflation rate, during the retirement, as shown in the second step. Now take net returns on the investments you have made, your future annual expenses and any payment obligation you might have. Now using a pension calculator, arrive at the retirement corpus you will need.

Now the question is how much you would need to invest monthly in order to build this retirement corpus.

  1. Fourth Step: Calculate Your Current Asset Value

Here you will need to carefully factor in all your current assets such as equity stocks, mutual funds, PPF, EPF, etc. and their values. The value of your assets will reveal the deficit amount from your retirement corpus, as shown in step three.

  1. Fifth Step: Amount of Monthly Investment

Now when you know the deficit amount, using a pension calculator, you will be able to easily figure out the amount of monthly investment you need to make in order to build the required retirement corpus. Simply invest in best Pension Plans options to ensure that you have enough investments and savings to cover for the deficit in your retirement corpus.

Conclusion

Now that you know how to easily calculate your retirement corpus using retirement planner and pension calculator, it’s time to put the learning into practice and start saving for your retirement years from today. Remember, the sooner you start, the better post retirement life you will get.