Retirement Calculator

How to use Retirement Calculator

1. Enter your current age, the age you want to retire and the age you want your money to last until.
2. Fill in your current monthly expenses, existing savings and what you invest each month now.
3. Edit the inflation and return assumptions to match your own view; the pre-filled numbers are examples only.
4. Read the corpus needed, the monthly investment required and the shortfall or surplus, then study the milestone table.

What the calculator does

A retirement calculator answers one practical question: how much money must be sitting in your investments on the day you stop working so that withdrawals can pay for your lifestyle until the end of your plan. This tool works in three steps. First it inflates your current monthly spending to the cost at your retirement age. Second it finds the lump sum that, invested at your post-retirement return while withdrawals grow with inflation, is exactly used up at your planning age. Third it works out the regular monthly investment that grows your savings to that lump sum.

The formulas are shown here so you can check them. Future annual expense E = monthly expenses x 12 x (1 + inflation)^years to retirement. With withdrawals taken at the start of each year, corpus = E x (1 - q^M) / (1 - q), where q = (1 + inflation) / (1 + post-retirement return) and M is the number of retirement years. Monthly investment = (corpus - savings x (1 + return)^N) / ((1 + m)^(12N) - 1) / m, where m is the monthly rate equal to (1 + annual return)^(1/12) - 1.

A worked example

Take someone aged 30 who plans to retire at 60 and fund life until 85, spending 50,000 a month today, with 5,00,000 already saved. Using the example assumptions of 6 per cent inflation, 12 per cent before retirement and 8 per cent after, the first retirement year costs about 34,46,095 (that is 50,000 x 12 x 1.06^30). The corpus needed at 60 comes to about 6,94,68,933. The existing savings grow to about 1,49,79,961 by then, so roughly 5,44,88,972 remains to be built, which needs a monthly investment of about 17,853.

Change one assumption and watch how sensitive the result is. If the pre-retirement return is 10 per cent instead of 12, the required monthly investment rises substantially. This is why the page invites you to test several scenarios rather than trust a single number.

Tips, limits and privacy

Keep the return after retirement lower than the return before, because most people hold safer assets once they stop earning. Be careful with a very long retirement; planning to 90 or 95 is a sensible safety margin. The model assumes steady returns each year, but real markets are uneven, and early losses just after retirement can hurt more than the average suggests. It also assumes contributions stay level, while most people raise their saving as income grows, which would reduce the starting amount.

All calculations run in your browser; nothing you type is uploaded or stored. This is an educational estimate, not financial advice. Speak to a qualified adviser before making decisions about your retirement.

• Revisit the plan once a year and after major life events.
• Test both pessimistic and optimistic assumptions.
• Remember that taxes and fees reduce real returns.

Why use this retirement calculator tool

• Inflation-adjusted expenses. Your present monthly spending is grown to its future cost at retirement, so the corpus is expressed in money of that year.
• Drawdown with its own return. The corpus is sized so that withdrawals, rising with inflation, last until your chosen age while the remainder keeps earning the post-retirement return.
• Shortfall or surplus. Compares what your current savings and monthly investment will grow to against the corpus needed.
• Milestone table. Shows the balance every five years on the way to retirement and through retirement, ending near zero at your planning age.

Frequently asked questions

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