Retirement is the time of our lives for which we plan for years in advance. Termed as peaceful and prosperous, every individual in today’s time wants to spend that specific phase of their lives without having to think much about expenses. It is always advisable to plan retirement well in advance. Although there is no hard and fast rule for the calculation of retirement savings, there are several aids to help us with the same. A pension calculator is a tool that helps individuals in planning for a safe and secure life, post-retirement.
A pension calculator helps you to get a fair idea of future pension. Source: Pixabay
What is a pension calculator and how it helps?
A pension calculator is a simple application that helps an individual in the proper planning of their life post-retirement. The tool requires an individual to put certain details like the amount one plans to save or withdraw in the form of pensions. Using a pension calculator, you can plan your life in an efficient manner where you have a proper budget for everything, ranging from travelling to medical emergencies. Lastly, if you also want to have an estimate on the amount of money that needs to be saved on a periodic basis, calculate pension with pension calculator here.
How to start investing from an early age to plan your retirement?
If you are currently in your 20s or 30s and have the dream to retire comfortably then you should start investing from an early age. Here are some points that you can consider:
- Diversify your investments: You should keep in mind to invest in different options and not just focus on one mode of investment. You can invest in mutual funds, long term funds, have a PPF account, long-term fixed deposits and more.
- Research: Dedicate time for researching and finding out the best investment options, risks associated, performance of different funds and more. This will definitely make you better at investing. You can also check out investment apps and their alternatives here.
- Plan for big life events: If you start planning for your life events early on, you shall be prepared to deal with the expenses as they come by.
A guide to plan your retirement using Scripbox’s pension calculator:
Before you begin investing in any form of scheme, it is essential to understand the need for your savings based on your requirements:
- Understanding your need for savings: The amount of savings which is needed for your daily life after retirement needs to be pre-planned. A pension calculator will help you with the amount that needs to be saved, based on your needs post the salaried life. The amount of money that needs to be invested depends on the type of lifestyle you choose. It can be used for travelling, to meet your daily expenses, to meet a certain requirement goal or similar needs.
- Decide your retirement age: The second essential step towards the effective planning of your retirement is to understand the retirement age. The age at which you want to retire is crucial as this determines the amount of saving that needs to be done. If you wish to retire at an earlier stage in life, the amount of savings for a life post-retirement is high and vice versa.
- Evaluate your current investments and savings: Another crucial step while planning for your retirement is evaluating the future value of your current savings and investments. To establish a proper future, you need to understand the amount of money that can be pulled out in the form of savings. A higher amount of saving leads to high investment, thereby providing a better return at the time of your retirement.
Using Scripbox’s pension calculator:
Scripbox’s pension calculator is one of the most effective tools present in the market. To understand the use of the tool, you need to follow the steps as listed below:
- Entering basic details: The first and foremost step towards the calculation of pension is to enter your basic details that include age, life expectancy, and retirement.
- Detailing monthly expenses: The second step towards the calculation of funds is to fill your monthly expenses that can comprise of rents, dues, etc.
- Existing Investments: The last and the final step for the calculation of pension using the pension calculator is to find the current value of your investments if any.
Once all the variables are placed, you can get your estimate of funds that would be required for retirement.
Benefits of using Scripbox’s pension calculator:
- Ensures a secured future: Scripbox’s pension calculator helps you with the correct estimation of the funds you might need. With a proper pension at the end of every month, you are reluctant about the expenses you need to manage at the time of your retirement. Moreover, due to their nature of increasing due to inflation, investing in sudden mutual funds leads to a greater amount of return over a period of time.
- Attaining Tax-efficiency: One of the major highlights of using a pension calculator is that it helps in attaining tax-efficiency. Choosing the right pension scheme allows the investors to get exemption on taxes, as stated under Section 80C. Scripbox helps you in selecting the right scheme, as there are sudden pensions plans set by the Indian Government like the Income Tax Act, 1961 offering tax deductions under Chapter VI-A, Section 80C, 80CCC, and 80CCD.
- Identifying Low liquidity: Yet another important perk of pension plan is their low liquidity. Low liquidity refers that you can withdraw some amount of money on the funds that have been accumulating under a fixed scheme. Scripbox’s pension calculator helps you in identifying low liquidity that ensures the investor’s protection, saving them from any form of loan trap at the times of emergency.
Saving for a hassle-free life post retirement is as important as earning in the current period. Pension is an essential backbone for life after retirement. It is always advisable to understand all the scheme related documents carefully before investing into one.