Retirement Corpus Calculator: Age 30 years; monthly expenses Rs 35,000; retirement age 55; know required corpus and monthly SIP and lump sum investments to achieve that goal
Retirement Planning: The assessment of your retirement corpus is important since it gives you an idea of how much money you require to live a comfortable life post retirement. You need to plan it early and start investing soon.
Retirement Planning: What can be possible income resources post retirement? Income from investments, rented property, or other sources one has created. But retirement planning should be started early. The benefit of early retirement planning is that one can start their investments with a lower monthly amount compared to a late starter who starts with a much higher amount to achieve the same retirement corpus.
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What is retirement age?
In terms of financial planning, retirement is the age when one has sufficient passive income sources to run their daily expenses. It's a stage where they don't have to depend on income from a job or a business for their expenses.
How is retirement planning done?
Considering one's current age, they need to assess at what stage of their life they want to retire. They need to assess their financial goals, liabilities, and expenses post retirement. All these things should be calculated keeping inflation in mind. The corpus should not be run dry throughout life expectancy.
How retirement fund can be generated
It can be generated through investing in retirement-centric schemes—fixed income or market-linked. Individuals can create rented property sources and other income sources from where they earn regularly and where their income rises every year.
Important factors to know in retirement planning
Inflation and post-tax returns are key factors in determining the amount of a retirement corpus. Inflation will rise and taxation rules will change. With this, one needs to review their retirement strategy every few years.
Retirement corpus calculation
Age: 30 years
Retirement age: 55 years
Life expectancy: 75 years
Monthly expenses: Rs 35,000
Current corpus: 0.
Expected return from investments: 12 per cent
Expected return from corpus post retirement: 6 per cent
What will be expenses at 55?
At 6 per cent inflation, for a 30-year-old with Rs 35,000 monthly expense, the expense after 25 years will be Rs 1,50,215 a month.
Future retirement corpus required to achieve that target
The person needs to have an estimated corpus of Rs 3,60,51,600-0 (the future value of your current investments) = Rs 3,60,51,600.
What should be monthly SIP investment for that?
At 12 per cent annualised growth, the estimated monthly SIP investment to achieve that target should be Rs 18,998.
What should be lump sum investment for that?
At 12 per cent annualised growth, the estimated lump sum investment to achieve that financial goal should be Rs 21,20,675.
Disclaimer
This is not investment advice. Please do your own due diligence or consult an expert for retirement planning.