Important Notices
Income vs Expenditure: Your income and expenditure are independent. Don’t mix your investment amount with monthly expenses—keep them separate when calculating your financial plan.
Inflation Impact: Inflation significantly increases future expenses. Always provide a realistic inflation rate to estimate your actual financial needs accurately.
SIP and Step-Up: The step-up rate for SIP is optional but helps if your income increases yearly. Consider gradually increasing investments to build a larger retirement corpus.
Post-Retirement Investments: After retirement, ensure you have a realistic CAGR assumption, as growth might slow during the withdrawal phase.
Corpus Sustainability: If your withdrawals exceed the investment growth rate, the corpus will eventually deplete. Plan expenses carefully.
Life Expectancy Planning: Plan for a realistic life expectancy to avoid running out of funds in your later years.
Emergency Funds: Keep a separate emergency fund for unexpected expenses. Do not rely on your retirement corpus for emergencies.
Retirement Planning Timeline: Start planning early. The earlier you invest, the more your money benefits from compounding growth.
Realistic Inputs: Provide practical values for CAGR and inflation—too optimistic or too pessimistic values may mislead your financial planning.
FAQs
What is the purpose of this calculator? This calculator helps estimate whether your investments will be sufficient to meet your retirement expenses and identifies the age at which your savings might run out.
What inputs do I need to provide? You need to provide your current age, retirement age, life expectancy, current monthly expenditure, SIP investment amount, step-up rate, lump sum investment, inflation rate, and CAGR.
What is the step-up rate? The step-up rate is the percentage increase in your monthly SIP each year, allowing you to align investments with income growth.
How does the calculator consider inflation ?Inflation increases future expenses. The calculator projects how much your current expenses will rise by the time you retire and during retirement years.
How is the investment before retirement calculated? The calculator considers your annual SIP (with step-up applied) and the growth of your investment through CAGR until you reach your retirement age.
What is the retirement corpus? The retirement corpus is the total amount of money you will have at the time of retirement, which is used to meet your expenses post-retirement.
How does the calculator handle withdrawals after retirement? The calculator subtracts annual expenses (adjusted for inflation) from the remaining corpus each year. The leftover amount grows based on CAGR.
What happens if my corpus runs out? If your withdrawals exceed your investment growth, your corpus will eventually be depleted. The calculator shows the age at which it happens.
What is the “minimum corpus required”? The minimum corpus required is the amount of savings you need at retirement to sustain your expenses until your life expectancy.
How does the remaining corpus sometimes grow during retirement? If your CAGR is higher than inflation, the remaining corpus can grow despite annual withdrawals.
What if I don’t have a lump sum investment? If you don’t have a lump sum, the calculator assumes you start with monthly SIPs alone.
Can I modify the inflation and CAGR rates? Yes, you can adjust these rates to see how they impact your retirement plan.
Why does the calculator output the age of corpus depletion? It warns you if your savings won’t last for your entire retirement, helping you adjust investments or expenses.
What assumptions does the calculator make? The calculator assumes a constant CAGR, inflation rate, and annual SIP step-up rate throughout the planning period.
Is it mandatory to provide a step-up rate? No, it’s optional. If you leave it blank, the SIP will remain constant throughout.
What happens if the SIP amount is insufficient? The calculator will indicate that your investment is not enough to meet post-retirement expenses.
Can I plan for early retirement using this calculator? Yes, by entering a lower retirement age, you can see if early retirement is feasible with your savings and investment plan.
Why is it important to provide a realistic life expectancy? Underestimating your life expectancy could lead to running out of funds in your later years.
What happens if inflation is higher than investment growth? If the inflation rate exceeds CAGR, your corpus will deplete faster, and you may need to invest more to sustain expenses.
Can this calculator replace professional financial advice? No, this is a tool for estimation purposes. For personalized financial planning, consult a qualified financial advisor.
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