Pension Calculator

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:

1. Go to the link: Pension Calculator
2. Enter your personal information, such as age, monthly income/expense
3. The calculator shows results in the form of an expected monthly pension at retirement and the amount you need to save to achieve this.
4. You can change the monthly expenses, income, and retirement age to understand how your savings and investment period will impact your retirement plan.
5. You can choose the various pension plans available on the website
6. 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:

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.