The low-stress retirement calculator (hopefully!)

Published: September 29, 2014 at 9:46 am

Last Updated on

The first time someone uses a retirement calculator, they are in for a couple of rude shocks!

  • The corpus required for financial independence post-retirement, taking inflation into account typically would be a few crores (if not several!)
  • Therefore the monthly investment required is typically equal to monthly expenses or even more!

Becuase of this I get more bricks than bouquets for my retirement calculators 🙁

With an aim to lower user stress here is an alternative version which explicitly accounts for three types of current  and future investments:

  • equity investments
  • taxable debt investments (fds, debt funds, gold, etc.)
  • tax-free debt investment (PPF, EPF)

It also takes into account future EPF contributions.

The corpus necessary for financial independence is reduced by the expected future value of current investments and future EPF contributions. This (hopefully!) would look a lot less daunting.

The sheet then asks you the intended asset allocation for future investments an annual increase in monthly investment.

The monthly investment required in each asset class and the expected future value at the time of retirement are calculated.

freefincal-retirement-calculator

 

My aim is to make a visual retirement tracker (like the visual SIP tracker) with this sheet as the basis.

I have annotated the inputs following a suggestion by Raghavendra Paripati. This tool was made after discussions with Aparna. Check out her presentation: An Introduction To Personal Finance For Young Earners

Do let me know if any additional features are necessary.

Update: Download the even lower stress retirement calculator!

Download the low-stress retirement calculator

Do share if you found this useful
Share your thoughts on this topic at the  Reddit freefincal_user_forum

Reach your financial goals like a pro! Join our 1600+ Facebook Group on Portfolio Management! You can now reduce fear, doubt and uncertainty while investing for your financial goals! Sign up for our lectures on goal-based portfolio management and join our exclusive Facebook Community. The 1st lecture is free!
Want to check if the market is overvalued or undervalued? Use our market valuation tool (will work with any index!) or you buy the new Tactical Buy/Sell timing tool!
About the Author Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman 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. He conducts free money management sessions for corporates and associations on the basis of money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association. For speaking engagements write to pattu [at] freefincal [dot] com
About freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. We operate in a non-profit manner. All revenue is used only for expenses and for the future growth of the site. Follow us on Google News Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any kind of paid articles, promotions or PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this 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 Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis 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 earner

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new 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 Rs 199 (instant download)
Free android apps