How Much Will You Need Once You Retire?
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Retirement should be a peaceful and hassle-free time for you. But without a steady income, most retirees worry about their finances and struggle to maintain their standard of living. Estimating how much money you need once you retire can seem overwhelming. Let’s look at some calculations you can use to plan your finances in your golden years.
How Much Do I Need to Retire Comfortably?
You can estimate your post-retirement savings by looking at your current expenses. Apart from your daily commute, most of your daily expenses will remain the same once you retire. Aim to maintain 80% of your annual working income as your retirement income. Remember to account for inflation to continue to enjoy your standard of living.
The 80% rule only works if you do not foresee new expenses. Some people wait until retirement to start travelling or picking up hobbies, which require some monetary investment. Understanding how much you need also depends on your retirement goals.
Will a Retirement Calculator Help?
A retirement calculator can help if you’re struggling to work out how much you need to retire comfortably. These online tools offer the following benefits:
Helps with Planning
The calculator tells you how much you need to save for your retirement. It uses your income, monthly expenditure and current investments to provide an estimate.
Provides Clarity
The calculator lets you know how much your current investments will grow when you plan to retire. It will also provide an estimate of how much you need to maintain your standard of living. You can use the information to invest and save more if required.
Offers Easy Comparison
Online retirement calculators identify gaps in your current financial plan. You can use the calculator to see how various investment options can help you meet your goal.
How Do I Use the Retirement Calculator?
You can estimate how much you need to retire comfortably with the HDFC Life Retirement Calculator. You must provide your current and desired retirement age, annual income and growth rate, current savings and investments, and monthly expenses. The calculator uses these details to provide the estimated amount you need when you retire. It will also project how much your current savings and investment will grow and tell you how much you still need to save.
How Do I Save for Retirement?
While working, you could put 10-15% of your pre-tax income into a retirement or annuity plan. These plans safely grow your money for the future and provide a monthly amount once you retire. However, it’s a good idea to supplement these policies with other investments like ULIPs. Along with the HDFC Life Systematic Retirement Plan, consider getting a ULIP. The ULIP enables you to build a corpus based on your risk appetite. You can opt for a slightly aggressive investment approach with your ULIP while your retirement plan grows steadily.
The retirement calculator and prudent planning can help you enjoy a carefree retired life.
ARN : ED/12/22/31012
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HDFC Life Systematic Retirement Plan (UIN:101N143V06) is an Individual/ Group, Non-Participating, Non linked, Savings Deferred Annuity Plan. For more details on risk factors, associated terms and conditions and exclusions, please read sales brochure carefully before concluding a sale.
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