Retirement Planning Calculator

What Is Retirement Planning Calculator?

A retirement planning calculator is a utility tool that shows you the amount of money you need after retirement. It helps you to plan your investments to get the desired retirement corpus at the time of retirement. The retirement planning calculator help you estimate the amount you need to maintain your current lifestyle after retirement.

Formula For Retirement Planning Calculator

The retirement planning calculator will estimate the amount you require in retirement, the formula for which is given below:

FV = PV*(1+r)^n

Where, 

• FV = Future Value.
• PV= Present Value
• r= expected inflation at 6%
• n= time to retirement

Example For Retirement Planning Calculator

Let’s assume you require a monthly income of Rs 35,000 in retirement. You are presently 35 years old and plan to retire at 60 years of age. What is the retirement corpus you need on investing the retirement savings in a bank FD which offers an 8% yield? (Assume Inflation at 6%)

Formula:
FV = PV × (1 + r)^n

Where:
FV = Future Value (income needed at retirement)
PV = Present Value = ₹35,000 × 12 = ₹4,20,000 per year
r = Inflation rate = 6% = 0.06
n = Years to retirement = 60 – 35 = 25

Step-by-step Calculation:
FV = 4,20,000 × (1 + 0.06)^25
FV = 4,20,000 × (1.06)^25
FV = 4,20,000 × 4.29187
FV ≈ ₹18,02,586

This means you would need ₹18.03 lakh per year at age 60 to maintain the same lifestyle as ₹35,000/month today.

How To Use ClearTax Retirement Planning Calculator?

The ClearTax Retirement Planning Calculator is a handy tool that shows the annual income you need at retirement, to maintain the current lifestyle in seconds.

• You must enter the current age in years by using the slider.
• You then enter the desired retirement age and your life expectancy.
• Fill in the monthly income required in retirement along with the expected inflation rate, and the expected return on investment (Both pre and post-retirement).
• The ClearTax Retirement Planning Calculator shows you the annual income required immediately after retirement, the additional retirement funds which must be accumulated, and the monthly savings required to accumulate the fund.

Benefits of using the ClearTax Retirement Planning Calculator

• It helps you to plan your finances in the post-retirement years.
• You will have a clear picture of how much you need to save every month to meet your retirement goals.
• The ClearTax Retirement Calculator shows you the retirement corpus you need at retirement in seconds.
• The Retirement Calculator gives you an idea of the future value of your current expenses.
• The ClearTax Retirement Calculator helps you to plan for additional expenses in retirement and increase the investments right now if you find the retirement corpus to be insufficient.

Present value helps you understand how much to save today for future goals like retirement. By factoring in inflation and returns, you can plan smarter and ensure a comfortable life ahead. Starting early makes all the difference.