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Retirement Calculator -Comprehensive Version

Retirement Calculator: Comprehensive Version

This is an advanced retirement planner. It is comprehensive and therefore complicated. If you don't know much about retirement planners, read this first. Then use this beginners version to get used to the kind of inputs needed. You could then try the Lite version of retirement planner first.  Once you are comfortable about what is happening you could use this.

The comprehensive planner has three additional features when compared to the Lite version.
(1) you can include an overall loss to your corpus due to equity prior to entering the equity-free zone.
(2) If the calculated monthly investment  is too large (or small!) you could check the kind of corpus you will accumulate with a monthly investment of your choice. The planner will tell you if the amount is enough or in case you enter a high amount the extra corpus you are likely to get which you could then invest to leave behind an estate. If leaving an estate behind is an important priority on your list then this option is well suited for you.

This way of calculating estate differs from conventional calculations made in excel. I haven't got around to it as yet. Considering the kind of high inflation that persist in India the conventional estate calculation is likely to yield an unrealistically high monthly investment needed.

(3) The planner can accommodate the possibility of a passive income. Passive income is income from rental property, post office monthly income scheme (MIS), FD interest etc. Use this option only if the income is assured when you retire. If you are decades away from retirement, I suggest only taking into account rental property as passive income for this calculation. FD or MIS principal value will shrink with inflation. If you are less than 5 years from retirement then go ahead include it (but assume the inflation does not increase with inflation). You can add up to 3 different kinds of passive income  with a separate inflation rate.

Note: Passive income make a huge difference tomonthly investment needed for financial independence after retirement. So use with caution and use only if the income is assured. If you are doctor or painter or have a special skill set don't assume you will be able to make a living using it after retirement. No offense, just safer that way.

This is almost as far as my thinking takes me. I have covered all ... at least almost all necessary parameters associated with retirement planning.

Well ... there is one option which I have left out. It is relevant only for those close to retirement. If you choose to, or if you are forced to take up employment after retirement and if you are reasonably sure of how much you will earn, in principle the monthly investment needed could decrease by a little. I need to think a little more about how to go about this.

I would be delighted if you could let me know if I have left something out or if you have an unique situation which cannot be covered by the planner. The passive income option in this planner came about with such a feedback.

A detailed illustration is available here.

Good luck!

Comprehensive Retirement Planner

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6 thoughts on “Retirement Calculator -Comprehensive Version

  1. Jagan

    You are doing an excellent job. I have benefited from this. I had asked a financial planner to give me advice and after the 5th minute he started to talk about insurance and how it will be my panacea.
    Coming to the point,
    I think it will be good if you include the child education and marriage to the retirement planner calculator. Then alons this gives a comprehensive view. The work around that I did was to go to the goal calculators and figure out how much I needed to invest monthly for attaining that goal and then look at the monthly surplus investible and set my years for retirement.
    Once again thanks for taking your valuable time out in creating these calculators.

  2. Jagan

    also forgot to mention that if you could add the EMI part - these ideas are from your calculators only ( Comprehensive Insurance calculator) 🙂

  3. Puneet

    In this calculator, there is a row named "No of years you expect to work". What should we enter here as data, THE AGE AT WHICH WE WANT TO RETIRE (say 58) or OUR RETIREMENT AGE - CURRENT AGE(say 58 -26 = 32) ?

    1. pattu

      Hi Punnet, If you are 26, and want to retire at 58, the 'No of years you expect to work' = 32 as you point out.


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