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Pension Calculator

Pension Calculator

A financially comfortable retirement is the best retirement and for a comfortable retirement, a stable pension is key. If you want to build an adequate and stable pension for your retirement, start planning early with a pension plan calculator. A pension calculator will help you invest adequately to achieve your pension goal with retirement and pension plans.

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Pension Calculator

Retirement Calculator

Personal Information

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What is a Pension Calculator

What is a Pension Calculator?

A pension calculator is an online tool that helps you assess your investment for adequate pension later. The online pension calculator helps you to check if your current retirement investments are enough to provide you with the pension you will need.

A pension calculator works with a pension calculation formula based on the details you enter. These details are about your current and retirement age, investments, expected returns, etc. With these details into consideration, the pension calculator will provide you with the expected amount of pension you will receive.

A pension calculator helps you simplify your financial calculation so that you can focus on actionable results. Canara HSBC Life Insurance pension calculator is free to use online tool which helps you calculate your pension and thus plan your retirement more effectively.

How to Use Pension Calculator?

You can follow the following simple steps to use the calculator to find out the amount that you need during your retirement years:

  • 1Enter your current age, and expected retirement age
  • 2Enter the current monthly saving amount and any lump sum investment amount
  • 3Select a growth rate for the ongoing investments
  • 4Select the number of years you will need the pension for (10 years, 20 years or Lifetime)
  • 5Do you want the pension amount to increase every year to provide for inflation?
  • 6Calculate the pension amount you can expect under the chosen options

Required Fields in Pension Calculator

To find out the pension required by you monthly, you need to enter some information in the pension calculator. The required fields in the pension calculator of Canara HSBC Life Insurance Company are

Personal Information

Date of Birth

Enter your date of birth first. Date of birth helps in determining your current age for the calculator. For the most accurate results, you should enter the detail accurately as per your documents.

Retirement Age

Enter your expected retirement age here. Though the most common age for retirement is 60, you can enter different ages for the calculator. You can run different scenarios with different retirement ages to find the best possible for you.

Other Information

This step comes after you have entered your personal information.

Income and Expenses

In the income section, enter your annual income. Enter your net income as it will help to calculate the pension more effectively as this is the income you receive in hand.

Also, enter the number of expenses you incur per month.

Savings

In the savings column, enter the amount you have saved for your retirement to date. This saving amount can include your retirement savings balance so far.

Benefits of Pension Calculator

1

Helps in Sound Investment Planning

To use the pension calculator, you need to enter some details related to the current investments you hold, the returns you get, etc. The pension calculator gives you the amount that is based on your current investments.

With this, you will get an idea that whether you are on the right track and if not, then what investments can you further make to ensure a good pension.

2

Helps Compare Financial Plans

A pension calculator not only helps you in making your financial plans but also helps to compare them with other plans. You can get to know about what these different pension plans offer and which plan can suit you the most. After entering your details and arriving at an estimated amount, you can now check other pension plans to see the amount you have to invest.

3

Provides you with Clarity

You can get a much clear idea of your current financial situation as well as your future finances through the use of a pension calculator. The estimated amount shows you how much will you get a pension once you retire. This helps you assess and get clarity on where you are and where do you want to reach.

4

Easy to Use

Canara HSBC Life Insurance Company’s Pension calculator is free. It is very convenient and easy to use. All you need to do is to enter your current age, retirement age and your current monthly expenses. The calculator will give you an estimate in seconds.

How Pension Calculator can Help you?

Here is an example that shows how a Pension Calculator can help you.

Let us take the story of Virat as our example. Following are his details

  • Date of Birth: 05 January 1992
  • Current age: 30
  • Retirement age: 60
  • Current Income: Rs 7,00,000 p.a.
  • Savings till now: Rs 2,00,000

Virat wanted to know about the pension that he will receive after he retires. To calculate this amount, he used our pension calculator

  • As per details, Virat will be retiring in the year 2052
  • If we take into consideration the income hike of 5% per year, then his salary will be around 25 lakh Rs per annum.
  • Factoring in the inflation and other things, by the time he retires, Virat can have a monthly expenditure of 1.08 lakhs by the time he retires.
  • He needs to invest about Rs 21,000 per month to reach this pension per month.
    Add a sub-heading - Important Concepts about Pension

Important Concepts about Pension

Savings Vs Pension

Savings Vs Pension

The higher amount you save every month during your investment years, the bigger your retirement corpus will be. Thus, you can expect a higher pension amount during retirement years. Remember, you need to plan your retirement corpus as per your current needs and expenses. Also, while calculating the retirement corpus, you need to consider inflation and future expenses including emergencies so that you are well prepared for the uncertainties of life.

Retired Life vs Pension Amount

Retired Life vs Pension Amount

The longer your retired life will be the lower amount of pension you can expect out of your retirement corpus. As the same amount of corpus must last longer, your regular withdrawal amount automatically reduces. If you want to spend a lavish life after retirement, you will need to put more investments into your retirement and pension plan. As you age, you become more susceptible to diseases. Build a retirement corpus that can efficiently help you manage your medical expenses during retirement.

Inflation-Adjusted Pension

Inflation-Adjusted Pension

An inflation-adjusted pension means that your annual withdrawal will keep increasing to adjust for inflation. However, to ensure the longevity of your retirement corpus, you should balance your withdrawals in such a way that your initial withdrawals are smaller. While calculating your retirement corpus, you must consider inflation as the buying power of money slumps with time. The cost of healthcare may rise when you retire, or cost of food may also increase in the future. If you do not consider inflation while calculating your retirement corpus, you may have an inadequate fund, which will not be beneficial.

How Much to Save for Retirement?

This question leads many financial experts to draw very complicated and often scary pictures of your retirement plan. However, there is a simpler method you can follow to quickly get into action. Here quick start is important, as every additional year counts dearly.

For example, imagine you start to save Rs. 3000 p.m. now when you are 30 years of age vs a year later. If you start now, you will have about Rs 3.5 Lakhs more into your retirement kitty if your investment grows at 8% p.a.

Thus, any estimate you have should enable you to start saving towards retirement. The simplest method is the percentage of income method. This method simply rules out all the complicated assumptions and gives you a simple formula to continue your retirement saving for a long time.

10 – 15% of Your Income

As per this method, you can replace the monthly income you have at 30 years of age, by the time you reach 60. All you need to do is save 10 – 15% of your monthly income towards retirement.

If your investments can grow at 8% p.a. after tax, you will have enough money to draw an inflation-adjusted pension after you retire. The provided inflation rate remains equal to or below the income growth rate you had before retirement.

Thus, building an adequate retirement corpus is not rocket science. Instead, you simply need to continue increasing your regular investments as your income grows. This pension calculator will help you estimate the current status of your retirement funds, and whether it will provide sufficient pension to you later.

Pension Plan Calculator FAQs

What is a pension?

What is Pension?

A pension is a monthly income that you receive after you retire out of the money you saved before retirement. Throughout your work life, you can save a sum every month till you retire. These savings will build your retirement corpus, from which you can draw a pension after retirement.

After retirement, your income is no longer with you, but your expenses are still present. Pension helps you to take care of these expenses.

What are the types of pensions in India?

What are the types of pensions in India?

Pension plans can be divided into 4 broad categories. These are as follows

  • National Pension Scheme (NPS)

    NPS is a government-backed retirement savings scheme. In this plan, your funds are invested in the debt and equity market according to your preference. After 60 years, you can withdraw up to 60% of the corpus as a lump sum. The remaining (at least 40%) must go to an annuity plan to create a pension income.

  • Deferred Annuity

    These are the type of annuities in which the income to be received is deferred to a later date after the premiums are paid.

  • Immediate Annuity

    In this type, a lump sum is contributed to a regular income stream at the time of pay-out. Here the payment starts almost immediately rather than at a future date.

  • Pension Plans with Life Coverage

    These are options that not only provide you with a regular monthly income after retirement but also secure your life by covering for it financially.

What is a pension plan?

What is a pension plan?

A pension plan is a retirement plan that ensures you receive regular monthly income even after retirement. You are required to invest a sum regularly through your working life in your pension fund. As the years go by, you will have a solid corpus as your pension fund. This will be created into an income stream after you retire.

Some examples of pension plans are NPS, PPF etc.

How to calculate pension?

How to calculate pension?

Pension is essentially a type of monthly income that you receive after retirement. To calculate the pension that will be suitable, you need to ascertain the monthly expenses you will incur after you retire.

To calculate the pension that you will require, you can make use of the pension calculators. To use this, enter your details such as income, savings and expenses. Based on these, the pension calculator will give you an estimated amount of the pension you require.

What will be my pension after retirement?

What will be my pension after retirement?

To have access to a pension after retirement, you need to invest in a pension fund. The sum that you will receive as a pension will depend on the size of your retirement corpus.

Thus, the higher the retirement corpus, the higher will be the corpus. To ensure a better corpus:

  • Ensure that you start investing early
  • Invest as much as you can
What are the best pension plans in India?

What are the best pension plans in India?

There are different types of pension schemes and plans available in India, each has its set of different features and can cater to different audiences.

Some of the most popular pension plans in India are

  • NPS (National Pension Scheme)
  • PPF (Public Provident Fund)
  • EPF (Employee Provident Fund)
  • Annuity Plans
  • Annuity with life cover
Can I make early withdrawals from the Pension Plan?

Can I make early withdrawals from the Pension Plan?

Generally, making withdrawals before the age of 60 are not allowed. You can incur penalties on your withdrawals. However, rules may vary in each plan.

For example

  • If you have purchased NPS, then, in tier I accounts, there are restrictions on withdrawal. While you can withdraw easily in tier II accounts.
  • While in the case of PPF you can withdraw up to 50% of your fund after 7 years.
  • Policies such as Invest 4G allows withdrawal after 5 years.
How to calculate retirement corpus in India?

How to calculate retirement corpus in India?

The retirement corpus differs from person to person. To know how much you need for your retirement corpus, you need to assess things such as your expenses, your future goals, dependents, other plans after retirement etc.

You can use retirement calculators as well.

Is saving Rs.80,000 a year enough for retirement?

Is saving Rs.80,000 a year enough for retirement?

If your save Rs.80,000 a year for 25 years, you will save Rs. 20 Lakhs for your retirement. Now, consider all the expenses that you need to take care of and estimate whether the retirement fund you've built will support your expenses. If your lifestyle expenses are on a higher side, you must save a bit more to continue that same lifestyle even when you retire.

How much money do you need to retire comfortably?

How much money do you need to retire comfortably?

It depends on a variety of factors such as your lifestyle, habits, financial goals, income and expenses. Saving 70-80% of your pre-retirement income will help you lead a comfortable retirement life. You should have enough money to support your current lifestyle when you retire.

How can I buy the best pension plan?

How can I buy the best pension plan?

Estimate your retirement corpus as per your current income and expenses. Define your financial goals and investment capability. Search for a pension plan that offers you flexibility. Pension4Life plan is a life insurance cum pension plan that offers you life insurance cover along with giving you a guaranteed income stream as per your post retirement needs.

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