Retirement Planning: 3 Tips to Calculate Retirement Corpus

Retirement is a time of leisure, relaxation, peace, and calm. You no longer have to worry about work commitments or office deadlines. You can finally enjoy life at your desired pace and spend time doing the things you love. However, in order to do all of these things, you need to have a sound retirement savings plan. Planning for retirement well in advance will ensure that you have adequate funds to secure your future and do not have to depend on anyone else for your needs.

One of the most important aspects of a retirement savings plan is calculating the retirement corpus ideal for your future requirements. Find out how you can calculate this.

What is the ideal retirement savings plan corpus that you should aim for?

According to post-retirement tax and investment expert Jitendra Solanki, a person retiring today would need at least ₹1.5 crore for a retirement that lasts 25 years. The SEBI registered expert recommends people aged 30 who are saving for their future retirement needs should keep a minimum goal of at least ₹1.5 crore and add 7% inflation to the amount to ensure a comfortable retirement.

It is important to understand that when it comes to retirement savings, there is no universal figure that can fit all budgets. The right amount of savings would depend on several factors, such as your future goals, lifestyle habits, current income, inflation, and the number of family members dependent on you financially, among other things.

You can follow the advice of financial experts or simply use an online retirement planning calculator in India to get a general idea. But it helps to understand your unique needs and then determine the right retirement savings goal for yourself. Here’s how you can do this:

Tips on Planning for Retirement

- Calculate your expenses: You can start by calculating your expenses. This can include rent, groceries, electricity, loan repayments, children’s education costs, etc. Understanding your current expenses will give you an idea of your expenses in the future. Some general expenses might reduce or end in retirement like money spent on commuting to the office, money spent on your children’s education, etc. However, you will also have newer expenses like medical bills, long-term care expenses etc. Take these into account to arrive at a monthly figure that you would likely need in retirement.

- Add the rising rate of inflation: Inflation can render your savings inadequate. Therefore, it is very important to add inflation to your retirement savings goal. The value of money changes over the years. For instance, petrol cost ₹61.06 in Delhi in 2015. In 2021, it is currently priced at ₹96.66 in Delhi and is likely to increase more. Hence, you must include inflation in your calculations to determine a suitable retirement corpus for yourself. You can use an inflation calculator or look at past trends to estimate the inflation rate in the future.

- Keep some emergency money aside: Apart from your everyday expenses, you must also save for emergencies in the future. Getting loans can be tricky when you are older for several reasons. Firstly, loan providers are often sceptical about offering loans to retirees as they do not have a stable income source to pay off the loan. Secondly, it can be hard to pay high-interest loan EMIs when you have a limited savings pool. Therefore, you must keep aside an emergency fund that can cover at least 4 to 6 months of your living expenses. This can be helpful in case of medical emergencies, urgent home repairs, etc.

Where should you save your money?

You should look for a retirement savings plan that can offer returns that can beat inflation at low risk and high security. Savings plans by PNB Met Life can be a suitable choice here, and they offer life protection along with high returns that help counter inflation and secure your future financially.

To sum it up

So, use a retirement corpus calculator India to determine your future needs and start investing in PNB MetLife retirement solutions today!

Know more about term plan, term insurance and life insurance at PNB MetLife.

Doesn’t the thought of retirement sound blissful? No work, no deadlines, and all your hours spent doing the things you love, like travel, painting, and even napping in the afternoon! If you want your retirement to be what you have always dreamed of, start retirement planning now and save a considerable retirement corpus in time. The online Retirement Calculator can help you plan your future financial goals and ensure you achieve them within the stipulated time.