Retirement Calculator India

What is a Retirement Calculator in India?

A Retirement Calculator is an online financial tool that can help you to estimate how much money you or your parents/ family residing in India, will need to live a worry-free retirement. As an NRI residing in the USA, you can easily estimate the amount you can save each month to reach that goal.

A retirement calculator considers factors like your current age or your parents current age (if you are planning to buy a retirement plan for them), average monthly expenses, and the age at which you or your parents plan to retire. 

The pension calculator helps you plan and manage your finances so you can enjoy a comfortable retirement in the future.

Steps to Use a Retirement Calculator in India

• Step 1- Visit the Pension Calculator provided on this page.

• Step 2- Enter the required details like-

  • Your Current Age (or Parent’s age for whom you are purchasing the retirement plan)

  • Monthly Expenses

  • Expected Retirement Age

• Step 3- Calculation and Projection: The calculator uses this data to estimate your future retirement savings and monthly income. You can select the expected inflation rate for better retirement planning.

• Step 3- Review and Adjust: Analyse the results to see if adjustments are needed in savings, retirement age, inflation rate, or investment strategy to meet your financial goals.

Working of a Retirement Calculator in India

A retirement calculator estimates the corpus you/ your family/ parent will have by the time  they retire. It is done by factoring in compound interest because you earn interest on both your initial savings and the interest that accumulates.

Future Value = Current Savings × (1 + Expected Return Rate) Years Until Retirement + (Monthly Contributions × Number of Months Until Retirement)

Let us understand this with an example where you plan to purchase an annuity plan for your parents who are living in India. If the current of your parents is 50-year-old and plans to retire at 60. You estimate their monthly expenses to be ₹50,000 today. You expect a 6% annual inflation rate for future, then the monthly investment required should be as per the following calculation:

Pension Calculator Illustration

• Current Age = 50 years

• Retirement Age = 60 years

• Estimated Monthly Retirement Expenses = ₹50,000 (2024 value, adjusted for inflation)

• Expected Annual Inflation Rate = 6%

Retirement Calculator Results:

• Desired Monthly Expenses at Retirement = ₹89,542 (in year 2034; value adjusted for inflation)

• Expected Annual Inflation Rate = 6%

• Monthly Investment Required = ₹63,915 per month*

*Calculations done as per historical performance of 15% annual rate of return with retirement plans.

Benefits of Using a Retirement Calculator

Retirement calculators can be a valuable tool for anyone planning for their golden years. Some of the key benefits of using one are listed below:

• Clarity: Helps you understand how much you need to save for retirement.

• Goal Setting: This allows you to set realistic retirement goals based on your financial situation.

• Planning: Helps in creating a structured retirement plan.

• Adjustments: It lets you adjust variables like savings rate and the retirement age to see their impact.

• Confidence: Provides confidence that you're on track for a comfortable retirement.

• Awareness: Raises awareness about potential shortfalls in savings.

• Comparison: Allows comparison of different scenarios to find the best retirement strategy.

• Peace of Mind: Offers peace of mind by giving a clear financial picture for retirement.

Conclusion

For NRIs in the USA, using a Retirement Calculator in India offers a strategic tool to plan for financial stability post-retirement. By factoring in variables like savings, investments, and inflation rates specific to India, NRIs can make informed decisions about their retirement goals and financial strategies.