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Retirement planning is the single most important financial goal common to every individual. It is the only financial goal in which a corpus would get spent over the course of decades!
Retirement planning is simply non-negotiable. The cost of postponing systematic retirement planning is more dangerous than inflation.
Regular readers would be aware of that a wide range of retirement calculators is available at freefincal for efficient planning.
Anyone, from the absolute beginner, to someone planning early retirement, to someone nearing retirement, can use these tools to evaluate their options.
There are also two unique tools for someone close to retirement (early/normal: to plan their post-retirement investment options
When I was trying to put together an article on ‘how to generate an inflation-protected income stream with a lump sum’, I realised the need to answer the following question:
Given a lump sum, what is the rate of return required to generate an income that increases in step with an assumed inflation rate for the reminder of our lifetime?
Since none of the existing calculators explicitly answer this question, I decided to make one.
Here are four calculators that will help you answer:
- What is the corpus required, for an assumed annual payout(annuity/pension), inflation, rate of return and duration?
- What will be the annual payout, for a given corpus, assumed inflation, rate of return and duration?
- How long will a corpus last, for a given corpus, assumed annual payout, inflation and rate of return?
- What is the rate of return required to ensure a given corpus lasts a specific duration for an assumed inflation and rate of return? (new addition)
- I have also included the retirement planner for beginners so that the file can be used all – those, far from retirement, close to retirement and in retirement!
Note: These are called annuity calculators. Well, at least the math is referred to as annuity calculations.
Strictly speaking an annuity represents an annual/quarterly/monthly payout made by an insurer after taking a lump sum from a retiree. In India, annuities are not linked to inflation. LIC offers an annuity that increases 3% each year.
If a retiree has a large corpus, buying an annuity is the very last thing a retiree should do!
Annuities are strictly for those who cannot afford to allocate a part of their nest egg for investment and must use the entire sum to generate income from the first year of retirement. Sadly such income will be constant and will lose value with time.
So although I call them as annuity calculators, it is important to remember that calculations are made for inflation-indexed income.
Download the inflation-indexed annuity calculators (Apr 2014). Revised after incorporating Mr. Masilamani’s suggestion
Download the inflation-indexed annuity calculators (Jan 2014)
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About the Author
M. Pattabiraman(PhD) is the author and owner of freefincal.com. He is an associate professor at the Indian Institute of Technology, Madras since Aug 2006. Follow @freefincal “Pattu” as he is popularly known, has co-authored two print-books, You can be rich too with goal based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice.
Pattu publishes unbiased, promotion-free research, analysis and holistic money management advice. Freefincal serves more than one million readers a year (2.5 million page views) with numbers based analysis on topical issues and has more than a 100 free calculators on different aspects of insurance and investment analysis.
He conducts free money management sessions for corporates and associations(see details below). Previous engagements include World Bank, RBI, BHEL, Asian Paints, TamilNadu Investors Association etc. Contact information: freefincal {at} Gmail {dot} com (sponsored posts or paid collaborations will not be entertained)Connect with us on social media
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Content Policy
Freefincal has original unbiased, conflict-of-interest-free, topical reports, reviews, commentary and analysis on all aspects of personal finance like mutual funds, stocks, insurance etc. All guest authors and contributors to the site also do not have any conflict of interest. If you find the content useful, please consider supporting us by (1) sharing our articles and (2) disabling ad-blockers for our site if you are using one. No promotional content. We do not accept sponsored posts and link exchange requests from content writers and agencies. This is our privacy policy Our website is non-profit in nature. The revenue from the advertisement will only be used for hosting charges, domain registration charges, specific plugins necessary for traffic growth and analytics services for search engine optimisation.Do check out my books
You Can Be Rich Too with Goal-Based Investing
My first book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
My second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a young earnerThe ultimate guide to travel by Pranav Surya
This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for ₹199 (instant download)Free Apps for your Android Phone
All calculators from our book, “You can be Rich Too” are now available on Google Play!Install Financial Freedom App! (Google Play Store)
Install Freefincal Retirement Planner App! (Google Play Store)
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