When Can I Retire?

Unfortunately there is, or at least can be, a big difference between:
“When I WANT to retire” and “When I CAN retire”
WANT is governed by job pressure, stress, burnout etc.
CAN is unfortunately governed by how one can save, inflation, interest rates, life expectancy
Find out when you CAN retire using the excel based calculator.
Using the calculator is pretty much self-explanatory. Some additional notes are given below:
Notes:

  • Financial instruments like EPF, NPS, PPF and long-term equity investments dont attract tax on maturity or withdrawal. If you build your retirement nest egg with these you dont have to pay tax
  • Estimated tax rate on your pension is calculated in the following way: Assume you earn Rs. 1 lakh a year and your monthly expenses are Rs. 30,000. Your taxable income them is Rs. 12 lakh (ignoring other sources and 80 C deductions for simplicity). The calculator calculates the tax payable per month if your monthly income = monthly expenses (that is Rs. 30,000). This will be typical situation when you retire. The pension you get will be predominantly used for expenses and not for investing. So it should be lower than or at best equal to the present tax payable per month for a monthly income of Rs. 30,000.
  •  Do as directed in cell ‘C12’ until results are displayed.
  • The money flow chart worksheet gives a detailed view of how your corpus will grow year-on-year to retirement and deplete year0on-year after retirement.
  • If you wish to and if you can retire early at say, age 45, you should assume will live at least until 80. That is a good 35 years in retirement. You are not ready for retirement until and unless you have a corpus which will give a inflation-indexed (increase with inflation each year) pension for 35 years. Of course you can supplement it with part-time work, but it is best to not reply on this too much. If you do it will be come a full-time job before you know it.
  • Why did I do this calculator? I didn’t do this calculator for my use. I use the retirement calculator that is uploaded in the ‘Calculators Offered’ tab. This uses the same mathematics as the other retirement calculator with one important difference which interested me and  may also interest students of finance. In a compound interest problem if the principle is fixed the period or time (in this case time to retirement) can be found out easily. If the principle varies (increase or decreases by a set rate) each year then the problem cannot be solved by algebra and therefore by excel. I have made a simple workaround in which the user iteratively arrives at the answer.

Download the: When Can I Retire? calculator

Want to conduct a sales-free "basics of money management" session in your office?
I conduct free seminars to employees or societies. Only the very basics and getting-started steps are discussed (no scary math):For example: How to define financial goals, how to save tax with a clear goal in mind; How to use a credit card for maximum benefit; When to buy a house; How to start investing; where to invest; how to invest for and after retirement etc. depending on the audience. If you are interested, you can contact me: freefincal [at] Gmail [dot] com. I can do the talk via conferencing software, so there is no cost for your company. If you want me to travel, you need to cover my airfare (I live in Chennai)

Connect with us on social media


Do check out my books


You Can Be Rich Too with Goal-Based InvestingYou 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 customg solutions for your lifestye!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 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 youngearner

The ultimate guide to travel by Pranav Surya

Travel-Training-Kit-Cover 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)

Create a "from start to finish" financial plan with this free robo advisory software template


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)
Find out if you have enough to say "FU" to your employer (Google Play Store)

About Freefincal

Freefincal has open-source, comprehensive Excel spreadsheets, tools, analysis and unbiased, conflict of interest-free commentary on different aspects of personal finance and investing. 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. We do not accept sponsored posts, links or guest posts request from content writers and agencies.

Blog Comment Policy

Your thoughts are vital to the health of this blog and are the driving force behind the analysis and calculators that you see here. We welcome criticism and differing opinions. I will do my very best to respond to all comments asap. Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete the entire comment or remove the links before approving them.