What is retirement? If go with dictionary definition, it is that phase of life where an individual stops working/employment completely. According to us it is the best phase of life where an individual is now free to enjoy his/her life and live it to the fullest. One does not have to slog through the same old monotonous office life. It is the when a person can do what he/she loves to. And to fulfil all these one needs have a strong retirement plan, which can be created with help of pension calculator.
Pension calculator a tool which you get an estimate of how much income you will need when you retire. It helps you calculate the retirement amount on the basis of age, annual income, savings, nature of accommodation, and the expected growth rate. In order to calculate pension following information is required:
1. Date of Birth: At the time of buying a policy based on the calculation of pension calculator one needs to provide with the date of birth, which is basically needed for record keeping purpose. It is always advisable to enter the date of birth as per government ID.
2. Retirement age: the best part about pension calculator it that it allows you to choose a retirement age as per your own desire rather than going for the official age of retirement as per government rules i.e.60 years for salaried people. This feature has been added keeping in mind the self-financed and voluntary or early retirement.
3. Annual income: in case of annual income it is advisable to enter the net income instead of gross income, as your income might include some fringe benefits which are given to you by your employer but not actually received in account.
4. Savings: in this field you are supposed to enter the amount of savings you have till date. It not only considers savings in the form of cash but also investment in various instruments like fixed deposit, recurring deposit, equity-linked saving schemes, etc.
5. Post Retirement Accommodation: in this field you are supposed to enter the nature of your accommodation after retirement i.e. whether you are living in a property owned by you or on rent. In cases like where you are still paying EMIs towards the loan then you are supposed to consider it while mentioning your annual salary in the pension calculator.
Most of us tend procrastinate retirement planning and saving for future, with the help of retirement calculator we can very get an idea of amount of money required post retirement and helps us lead a smooth hassle free life.
Thus, the importance of pension calculator cannot be denied, as it not only helps an individual to gather retirement fund but also help them accomplish their aspirations and goals.