Have you started planning your retirement? If you’re an early or mid-stage working professional, the question may come as a shock to you. In fact, many young professionals choose to ignore or brush away these questions, saying that they still have ample time left to make decisions regarding their post-retirement life and finances. Yet, it couldn’t be farther from the truth.
This is because there is something called inflation that you need to be aware of. In simple terms, it indicates the rising cost of living over the years. Now, something that costs Rs. 100 today may well cost Rs. 500 in another two or three decades. If your post-retirement funds and savings don’t match up to these needs, then you’ll have to spend your sunset years amid monetary worries and stress. Does it seem like something you want? The answer should be a big NO in this regard. Hence, you should first start using a retirement calculator right now to work out how much you can save and what you need to invest in order to get there.
Retirement Calculators Are Handy Tools for Future Planning
A retirement calculator is a highly effective tool if you use it strategically for planning your future finances. You should start using it early in life, perhaps in the first year of joining the workforce, to chalk out your journey towards investing for a comfortable retirement. While calculators vary across financial platforms and other websites, most of them require you to enter your present age, age of retirement, monthly income, life expectancy, and other details.
The retirement calculator will then give you an estimated amount of what you will have to save to meet your current lifestyle after retirement and the income that you will require after retirement. It will help you evaluate the impact of inflation on your savings while comparing multiple investment plans and the returns that they usually offer. You can set your future goals and then align them with the amounts you have to invest each month to achieve them in the future. The calculator can also help you plan for unexpected expenditures or emergencies after you retire. Thus, the retirement calculator helps you get an accurate estimate of what you’ll require to live in your desired style once you retire from the workforce. It will also help you set a clear roadmap as to what you will need to invest in order to achieve these targets.
The Earlier You Start, the Better
The earlier you start using a retirement calculator, the better it is for you. You can compare multiple investment plans and see what they offer in terms of returns. The next step will naturally be putting your money into these early investments based on your risk appetite, financial goals, and current monthly income (what you can spare to invest). It will naturally help you grow your wealth handsomely in the long run through compounding. However, you should invest in a disciplined manner for 15-20 years or more in order to build a good retirement corpus.
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