Pension Calculator

https://www.shriramfinance.in/pension-calculator

How much do you need to save for retirement?

Your Age (Years)

Current Monthly Expense

From which age you want to start pension?

Inflation Rate (Percentage)

At Age 25 (2024)

₹ 5,000

At Age 30 (2029)

₹ 6,381

Being retired comes with a host of perks. You can now travel the world, get that large garden you always wanted, or pick up long-time hobbies like golfing, cooking, baking, etc. It is the time you want to spend on yourself and your family. This transition in life also comes with certain challenges such as not earning a regular income stream, increased chances of health and fitness-related expenditures, etc. but this does not mean that your retirement should be worrisome. An effective retirement planning can pave the way for a fulfilling and financially secure chapter of life. For example, many people contribute to pension plans from the time they begin to earn, leaving them with a healthy corpus for their golden years.

Before contributing to pension plans, you should assess your earnings and expenses to identify the plans that align best with your financial situation and long-term goals.

Pension fund calculators Pension calculators would aid individuals in making strategic & informed decisions about their savings, investment choices, and retirement age thereby ensuring a secure and comfortable retirement. Continue reading to learn more about pension fund calculators. 

What is a Pension Plan Calculator?

A pension calculator helps you to calculate the amount you should invest to meet your retirement goals. Depending on your income, expenses, and retirement age, the calculator will help determine the pension you can earn in the future by investing systematically and periodically

How Does a Pension Calculator Work?

Most pension scheme calculators need the following inputs:

Current Age and Retirement Age

To determine the period for which you will be saving for retirement

Current Monthly Income

To calculate the pension amount required to maintain the current standard of living.

Current Monthly Expenses

To determine the amount of savings you can manage

Using the provided information, the pension calculator shows an estimated pension amount you can expect to receive at the beginning of your retirement and the monthly savings required to reach that goal.

Some calculators also ask you to share your current savings corpus and factor the same while calculating the amount you need to save every month for a desired monthly pension at retirement.

The Formula for Calculating Pension

Recently, the Employees Provident Fund Organisation (EPFO) introduced a new formula to determine the pension amount in cases where the pension's commencement date is after 01.09.2014.

The pension amount is determined by computing the average monthly salary received during the final 60 months leading up to retirement.

The formula for the same is: (Avg. salary for the last 60 months) X Service period/70

You can use Provisional pension calculators in case you receive a provisional pension

For other classic pension calculators, the pension amount is calculated assuming your expenses grow at an expected average inflation rate. The retirement pension should align with the anticipated monthly expenses during that period.

The calculator determines the corpus size you might need to support monthly pension payments. It then calculates the amount of savings you need to make every month to build the required corpus.

How to use the Pension Plan Calculator?

Here are the basic steps that you usually need to follow to use an online pension calculator:

Go to the link: Pension Calculator
Enter your personal information, such as age, monthly income/expense
The calculator shows results in the form of an expected monthly pension at retirement and the amount you need to save to achieve this.
You can change the monthly expenses, income, and retirement age to understand how your savings and investment period will impact your retirement plan.
You can choose the various pension plans available on the website
You can start saving in one of the plans once you have finalized them.

Other than the pension plan calculators that are available online, there are various pension scheme calculators that you can use:

Central government employees pension calculator for calculation of pension of central govt employees. Since pensions keep getting revised, you can use pension arrears calculators.
Post Office Pension Scheme Calculator for those who invest in National Pension Scheme

These calculators determine the amount you need to save in the specific pension scheme to start receiving the requisite pension amount at retirement.

Pension Tax Calculator Slab

The following table contains comprehensive details regarding the income tax brackets to be implemented in accordance with the most recent budget release:

Existing Tax Regime		New Tax Regime
Income Slab	Income Tax Rate	Income Slab	Income Tax Rate
Up to Rs. 3,00,000	Nil	0 – Rs. 3,00,000	Nil
Rs. 3,00,001 – Rs. 5,00,000	5% above Rs. 3,00,000	Rs. 3,00,000 – Rs.6,00,000	5%
Rs. 5,00,001-Rs.1000000	Rs. 10,000 + 20% above Rs. 5,00,000	Rs. 6,00,000 -Rs.9,00,000	10%
Above Rs. 10,00,000	Rs. 1,10,000 + 30 above Rs. 10,00,000	Rs. 9,00,00 – Rs. 12,00,000	15%
		Rs. 12,00,000 – Rs.15,00,000	20%
		Above Rs. 15,00,000	30%

Benefits of Using an Online Pension Plan Calculator

An online pension calculator is a great tool that one can use to estimate the amount they can have at the time of retirement. Here are some of the benefits of using a pension contribution calculator:

Retirement Planning

You can plan your retirement by checking how much money you need for retirement based on your expenses.

Set savings goals

Pension contribution calculators show the amount you need to save every month to afford your lifestyle after retirement. This enables you to set savings goals for yourself.

Test various scenarios

Pension contribution calculators allow you to change various inputs like retirement age, monthly expenses and sometimes even existing savings, to arrive at a suitable savings plan.

Investment Decisions

Many pension contribution calculators also provide various investment options for regular pension contributions. These help you make informed decisions on your retirement savings.

Free of Cost

A pension calculator can be used free of cost to determine various savings options.

Easy to Use

A pension calculator is easy to use and does not require any specialist knowledge to calculate your monthly savings for a desired pension.

Healthier, Happier Retirement

Planning for retirement using a pension calculator makes way for a healthier, happier, and self-reliant retirement.

Conclusion

Shriram Pension Fund calculator serves as a crucial tool for effective retirement planning. By assessing factors like current income, expenses, and retirement age, it offers invaluable insights into the amount needed to secure a comfortable post-retirement life. With the ability to explore different scenarios and savings strategies, individuals can set achievable goals, make informed investment decisions, and tailor their financial approach.

Frequently Asked Questions (FAQs)

What is a pensionable salary?

As per the Employee Provident Scheme, the pensionable salary refers to the average monthly salary received by the employee during the 60 months preceding their retirement. This average salary serves as the basis for calculating their retirement pension.

What is the monthly pension salary?

The minimum monthly pension salary is ₹9,000 for government employees in India. The pension is payable until demise.

How do I get a 50,000 monthly pension?

There are various pension schemes that you can invest in, to get a monthly pension of ₹50,000:

National Pension Scheme: As per the post office pension scheme calculator, if you begin saving ₹9,000 per month at the age of 31, you will be entitled to receive a monthly pension of ₹50,000 after retirement. However, it's important to note that the required savings amount will vary depending on the age at which you start saving for retirement.
Unit Linked Insurance Plan: Some ULIPs provide a pension at retirement. To secure a pension of ₹50,000 per month, you will need to save around ₹11,000 to ₹12,000 every month for a minimum of 25 years.

Other schemes that you can avail of to receive a desired pension income include:

Annuity Plan
Pension Plans with guaranteed returns
Mutual Funds

How to calculate a pension after 20 years?

After 20 years of service, the EPFO calculates the pension amount using the formula: (Avg. salary of last 60 months) X 20/70

How pension amount will be calculated?

Pension amounts can be calculated using various online pension calculators. These could be classic pension calculators available on the websites of financial institutions or through central govt pension calculators, whose links are shared above.

How can I check my pension online?

You can check the status of your pension online through the EPFO pensioner's portal by entering the pension office, Office ID and PPO number.

How many years of family pension?

Family pension is available to:

Widow/Widower of central government employees who died in service or while receiving a pension,
Dependent children until they attain the age of 25 years or until they get married or until they start earning,
Unmarried/widowed/divorced daughters until they get married, start earning or die,
Disabled dependents.

If a government servant passes away after one year of continuous service, their family shall be eligible for a family pension.

Is pension taxable?

Yes. Pensions are taxed in India, just like other forms of income.

Is pension income forever?

Yes. Pension payments typically continue throughout an individual's lifetime and, in some cases, extend beyond their demise, benefiting their spouse as well.

What is the latest age pension rate?

The minimum eligibility period for receiving a pension is 10 years of service with the Central Government. The latest minimum pension, as per the Pensioner's portal in India is ₹ 9000/- per month. The maximum limit is 50% of the highest pay in the Government of India.

Who is eligible for a higher pension?

As per the Pensioner's portal of India, older pensioners are eligible for higher pensions than calculated due to health-related expenses. The quantum of pension, therefore, is increased as follows

On attaining the age of Additional quantum of pension
80 years	20% of basic pension
85 years	30% of basic pension
90 years	40% of basic pension
95 years	50% of basic pension
100 years	100% of basic pension