Canara HSBC Life Insurance Retirement Planning and Pension Calculator helps you calculate the amount of retirement funds you will require to ensure a peaceful post retirement life. Retirement planner helps you determine how much corpus you need to build before you retire.
Few goals could be as important as the goal of retirement. This goal does not only mean that you will be leaving the active profession but also expects you to have built a strong financial base for yourself.
Retirement marks the end of one era and the beginning of another. Your wealth must carry the weight of your financial needs in this new era. The chances of earning from employment would be minimal and you would not want to depend on anyone else for financial support.
Thus, careful planning is very important for a comfortable retired life, and you need an accurate retirement calculation for a good plan.
A retirement calculator is a simple online tool that helps you calculate how much corpus you need to build to achieve post-retirement goals. You have to fill your personal details such as current age, desired retirement age, current monthly expenses, current savings for retirement.
In simple terms, the tool helps you to perform the complex calculations of retirement planning in just a few clicks. Retirement goal consists of two distinct stages of life:
1. Accumulation Stage: You save and invest money in this stage to build a large corpus before you can retire.
2. Distribution Stage: You build a regular income stream out of the corpus you have built in the Accumulation Stage.
Although the distribution stage comes after the accumulation stage in real life, planning must happen in reverse. Your actions in the accumulation stage are defined by the requirements of the distribution stage.
A retirement planning calculator helps you to build the scenario of both stages based on your present financial situation.
How Does a Retirement Calculator Help in Planning Your Retirement?
A retirement calculator should helps you determine the amount of money you need to start saving to achieve your retirement goal. For example, your current monthly expense is Rs. 50,000. If you wish to maintain this lifestyle post-retirement as well, the retirement calculator will help you in determining:
The ideal retirement corpus
A monthly savings amount you need to invest to achieve this corpus
Thus, a retirement calculator can help you define your retirement goal and chalk out a plan to achieve it. The retirement calculator from Canara HSBC Life Insurance helps you define your retirement goal considering the age you wish to retire at and the present retirement assets you have.
You can also use the retirement calculator to assess if your present retirement investments are on the track to fulfil your goal. If not, the calculator will give you an amount you can invest monthly to fill the gap.
How to use a Retirement Calculator?
Canara HSBC Life Insurance online retirement calculator is an easy to use tool, which offers you retirement goals with simple inputs. You can get to your retirement goals with the following five steps:
Choose your current and desired retirement age. Slid the bars on the age scales to select the correct number.
Mention your current monthly expenses. This expense should be the amount you expect to continue post-retirement. (see: Selecting Your Post-Retirement Expenses below).
Mention the current value of your retirement investments and select a growth rate for the investment.
Press ‘Calculate’ and check the following values:
Monthly Expense Post Retirement: This is the real value of your monthly living cost adjusted for inflation. The retirement calculator assumes an annual inflation rate of 5% p.a.
Retirement Corpus Required: This is how much money you must have before you retire. This online retirement calculator assumes post-retirement inflation at 5% p.a. and investment growth rate at 6% p.a.
Amount You Need to Invest Monthly: This is the money that you must save every month and invest towards your retirement goal. Canara HSBC Life Insurance retirement calculator assumes an 8% p.a. rate of return to estimate this amount.
Select a retirement plan to start an investment or leave your contact information to receive a call from an expert advisor.
5 Benefits of Using an Online Retirement Planning Calculator
Saving for your post-retirement life may be one of the important financial goals of your life. Accumulating the desired corpus will help you in leading a comfortable life after you decide to retire. And knowing how much you need to save will help you plan during your pre-retirement phase or working years
1. Simplify your retirement plan
2. Arrive at actionable steps quickly
3. Compare different scenarios like retiring at different ages
4. Assess your current retirement investments
5. Find out the probable size of your retirement corpus
How Much to Save for Retirement?
The amount of money you should save for your retirement depends on the following factors:
Your expected post-retirement expenses
Desired retirement age (or time to retirement)
Your expected living cost after you retire could be a fraction of your present household cost. In general parlance, mathematically your monthly income at the age of 30, should be enough to take care of your expenses at the age of 60.
However, both your income and expenses will rise with time, due to inflation. Your lifestyle expense may as well exceed your expectations or may even remain lower than that. However, in any case, the number will only depend on your income growth.
Therefore, it is wise to invest a portion of your income towards retirement, so that the corpus can replace your income after some time.
Given the interest rate and inflation conditions of India, starting at the age of 30 you can save 10-15% of your monthly income towards a comfortable retirement at 60.
However, if you wish to retire earlier, you may need to increase your investment, for example up to 20% if you want to retire at 55, and up to 35% if you want to retire at 50.
When a person retires, they receive certain benefits from their employer. That retirement benefit is taxable. However, some of them are exempted from taxation. When you buy a retirement plan, you are eligible for tax deductions of up to Rs. 1.5 Lakhs under Section 80C of the Income Tax Act.
You can use the online retirement calculator by Canara HSBC Life Insurance. The calculator only need details of your current expenses, your age, and the age you wish to retire at. Once you fill in this information, you can estimate the amount you will need to retire comfortably.
It depends on your current age, saving capacity and investment options. If you are 30 years of age, you will need to start saving anywhere between Rs 20,000 and Rs 25,000 per month to achieve your goal. Also, your annual savings must increase as your income does. Generally, a 5% p.a. growth in your investment amount will comfortably take you to the desired goal.
A retirement planning calculator is a free online tool to help you plan your retirement goal. Best retirement planning calculators help you understand your retirement financial needs and create an investment plan to meet the desired goal.
The amount you will need to retire is unique to your lifestyle, age, and financial needs. You can use the Canara HSBC Life Insurance simple online retirement calculator to assess your retirement needs. The online calculator helps you estimate your retirement funds based on your present monthly expenses, age and expected retirement age.
Any amount which enables you to receive sufficient inflation-adjusted income, after you have retired until your demise is a good amount to retire with. For example, if you are 30 and expect your post-retirement expenses to be Rs. 25,000 in today’s terms when you are 60, you will need about Rs. 1 lakh p.m. in real terms.
To generate such inflation-adjusted income for about 30 years after your formal retirement, you will need a corpus of about Rs. 2.3 crores.
The earlier you wish to retire the higher the retirement corpus you will need. This is because your post-retirement period extends by a few years. Thus, your corpus has to provide for a longer period than earlier. Also, your monthly savings must be much higher to achieve this corpus as you have less time for growing the invested money.
Ideally, you should aim to recreate your income which is a little more than enough to take care of your regular financial needs post-retirement. In India, the amount could vary depending on your financial condition, place of residence and lifestyle. In todays’ terms for an urban setting Rs. 50,000 to 1 lakh should be good enough to have a post-retirement income. However, for semi-urban and rural settings even a lower amount would work.
If you want to receive Rs 6000 a month as a pension when you retire, this is probably not enough money for a comfortable retirement if you have just started earning. However, if you are 25 and want to start saving Rs 6000 a month towards your retirement, this could be a good amount to start with. But imagine getting Rs.6000 every month to live your life after 20-25 years, when the cost of goods would have increased due to inflation. The amount may not be sufficient to take care of your post-retirement expenses.
Retirement is a long-term financial goal. Thus, in the early years, you can afford to take more risk on your investments and aim for better growth. However, after retirement even as an aggressive investor, you should avoid taking more risk than a AAA-rated corporate bond on your retirement kitty.
Thus, in the post-retirement period, your average rate of return would range between 6% to 8% p.a. depending on the market scenario.
How long will a corpus last depend on two factors – the amount of regular withdrawal and the rate of return on the invested money. If your withdrawal is lower than the rate of interest earned on the invested money, your corpus can last forever. For example, if you can invest Rs 1 crore at 6% p.a. after tax, you can withdraw up to Rs. 6 lakhs without depleting your initial corpus. However, if you withdraw Rs 7 lakhs p.a. your corpus will last about 28 years.
Terms & Conditions
This calculation is generated on the basis of the information provided and is for assistance only. And is not intended to be and must not alone be taken as the basis for an investment decision. The calculations mentioned above take into consideration an assumed rate of inflation of 5% and rate of return of 6% on post retirement corpus.