Life Goals Loading…

Get Life Goals Back-up Plan

Have us call you

Please enter a Name
Please enter a Mobile No.
Please select a option
Please select a option

Thanks for sharing your details, A Sales representative from
Bajaj Allianz Life will contact you shortly.

Dear Customer, we request you to connect with us in our next business working hours, (Monday to Saturday 24*6) Thank you, Have a great day ahead.

How To Calculate Your Ideal Retirement Corpus

Calculate your retirement corpus

How To Calculate Your Ideal Retirement Corpus


calender-blue

February 21, 2020

By : Bajaj Allianz Life

The increasing life expectancy and the rising cost of healthcare forces us to think about how our expenses would look like a couple of decades down the line. That thought also highlights the need to work on our retirement planning. One good way to plan for retirement is to invest in a pension plan or a retirement plan early in life. These plans often offer a retirement corpus at maturity. An ideal retirement corpus will help you manage all your post-retirement expenses and help you fulfil your life goals. Therefore, it is important to accurately calculate your required retirement corpus so that you have sufficient funds to meet your day to day expenses and do much more post retirement.

Let us take a look at the steps you need to follow to calculate your retirement savings corpus:

1. Make a few assumptions

Assume a few essential factors like the age at which you want to retire, your life expectancy, your rate of returns, which you could earn on your accumulated corpus, the rate of returns on your investments and the inflation rate. Once you’ve made all these assumptions, you can easily calculate the number of years still to go for your retirement, the number of years of your life post the retirement period, and the rate of returns considering the inflation.

For instance, take a look at the example mentioned below:

• Current age= 30 years

• Expected retirement age= 60 years

• No. of years left to retire= 30 Years

• Life expectancy= 85 years

• No. of years left after retirement= 25 years

• Rate of return during accumulation= 14%

• Rate of return after retirement= 8%

• Inflation Rate= 7.00%

• Inflation-adjusted returns= 0.93%

2. Evaluate the amount of required money

The second step to calculate an ideal retirement corpus is to find out the amount you will require every year to manage your daily expenses after retirement. The first step to calculate this is to be aware of your current yearly expenses. You can evaluate the amount by inflating the existing annual expenditure. For instance, assume your current expenses as Rs 7,20,000 per year and the annual inflation rate as 7%. Now, further to our assumptions above, take a look below to know the inflation-adjusted rate:

• Current annual expense= Rs. 7,20,000

• Inflation Rate= 7%

• Inflation-adjusted annual expense at retirement= Rs. 54,80,824

3. Calculate your retirement corpus

After following both the steps mentioned above, you can easily calculate your retirement corpus. A retirement corpus looks after your financial needs after your retirement. To find out the corpus amount, you should calculate the current value of your total expenditure needed for all the years after retirement. Given below are the calculations based on the assumptions:

• Inflation-adjusted expense at retirement= Rs. 54,80,824

• No. of years after retirement= 25

• Inflation-adjusted return= 0.93%

• Required corpus for retirement= Rs. 12,28,23,871

4. Create the target corpus

After calculating the corpus, you should find out the amount, which needs to be invested on a monthly basis to generate your target corpus. It can be calculated with the help of a PMT formula.

Go through the calculations given below:

• No. of years remaining for retirement= 30 years

• Rate of return during accumulation= 14%

• Retirement corpus required post retirement= 12,28,23,871

• Monthly investment= Rs. 22,360.

Using a retirement calculator is the simplest way to measure your retirement corpus. Once you’ve learned these steps, play around with the figures to understand the working of retirement calculators. In case there is a change in your retirement plan, use the calculator for precise calculations.

Bajaj Allianz Life Videos

Video Icon

Bajaj Allianz Life Goal Assure

Bajaj Allianz Life Goal Assure - A ULIP Investment Plan To Achieve Life Goals

Video Icon

Valentine's Day

Valentine's Day

Video Icon

Bajaj Allianz Health Care Goal

A Comprehensive Health Insurance Plan with Critical Illness Cover | Bajaj Allianz Life Health Care Goal

Video Icon

#36SecPlankChallenge video

Promote Healthy Living for a Better Tomorrow with our #36SecPlankChallenge

Calculators

Use our smart calculators to plan and achieve your Life Goals

  • The Tax Calculator

Contact Us

Bajaj Allianz Life Insurance Company Ltd.

Bajaj Allianz House, Airport Road, Yerawada, Pune - 411 006, Maharashtra

Tel No: 020-66026773

Fax No: 020-66026789

Branch Visit Timings:

Weekdays - 9:00 AM to 3:30 PM

Saturday - 9:00 AM to 12:00 noon

Customer Care Helpline:

1800-209-7272

Monday to Saturday: 9:00 AM to 7:00 PM (IST)

For NRI: +91 20 67871700 (Call charges apply)

Monday to Saturday 9.00 AM to 7.00 PM (IST)

Sales Enquiry Helpline:

1800-209-4040

Monday to Saturday: 9:00 AM to 7:00 PM (IST)

For NRI: +91 20 67688888 (Call charges apply)

Monday to Saturday: 9:00 AM to 7:00 PM (IST)