Retirement Planning Calculator – revised

Good planning depends on two things:

1. To have a goal
2. To establish a path to reach that goal.

Financial Planning is no different.

Once you zero down on your goals, you need to know what would it take to reach that goal and build an action plan.

One of such goals that everyone plans for is Retirement, or a more modern phrase, Financial Freedom.

Call it by any name (not quoting Shakespeare here), the purpose is the same – to know, how can you retire / achieve financial freedom as soon as possible.

Let’s use our retirement planning calculator to figure this out.

The Retirement Planning Calculator

Few months ago, I had shared with you an Excel-based retirement planning calculator. To say the least, it was a little simplistic. It only told you a constant amount that you need to invest every month.

See the calculation below. This is from the old calculator.

As you see, the calculator tells you to save Rs. 87,293 every month, every year. It is a constant number though.

But in reality, we grow our savings and investments over time. So we could start with a much lower amount and increase it every year to reach our goal.

The new retirement planning calculator incorporates this reality. Based on this, you would see that your savings amount seems much more doable.

See the calculation below from the new calculator.

The assumption we have made is that there would be a 10% increase in savings every year. Using it, in the first year, you need to save Rs. 34,396 per month to build your retirement fund.

In year 2, you would save Rs. 37,386 every month, in year 3, Rs. 41,619 every month and so on and so forth.

This definitely is a more realistic and hence a better approach. It is also in line with future income increases that you would expect and would allocate more money towards your goal every year.

So, now download the retirement planning calculator and find out for yourself what would it take to reach your own retirement and financial freedom.

Click here to download the new and improved Retirement Planning Calculator.

To know about the other input fields in the calculator, you can read the previous retirement planning post here.

Update: A new version of the retirement calculator updated on May 31, 2016 is available here.

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Between you and me: What do you think of the additional inputs? Do try it out and let me know your suggestions and feedback – in the comments section, of course. If you have any questions on this calculator, do send across.