When it comes to retirement it’s important to design a plan that provides you with your desired pension amount at age 60. For this and other reasons it’s critical you review your pension plan’s investments on a routine basis to make sure they are performing well.
An essential starting point is calculating desired pension income and setting it into motion. Once your plan is active review it at least once per month. This is an important habit to adopt when you enter the job market and are hired for your first job. With multiple options available for monthly pension plans calculating wisely will certainly help in the long run.
Use Online Calculators
It’s highly beneficial to use online calculators to determine how much you’ll need to save each month to receive your desired pension amount at age 60. A simple online search using your favorite search engine provides you with multiple calculators. These calculators allow you to estimate multiple benefits based on historical and future earnings.
Here is the step-by-step guide to calculate your monthly pension plan.
Step 1 – Create a history of your earnings and spending
As you’ve probably figured out spending money is much easier than earning it. With increased credit / debit card usage spending habits have changed. It’s important to take an honest look at your current spending habits.. Use these amounts to decide how much you would like to have available post-retirement. Once you have a sound idea of your monthly money transactions you can more accurately gauge the amount you’ll need to have on hand for retirement.
Step 2 – Choose Your Retirement Age and Target Income
Once you have the baseline of expected expenditure, you can figure out how to fund your retirement. Make a list of possible sources of income post-retirement. Before you calculate the amount, consider the retirement age.
To get to the correct figure you must save/accrue for retirement, you need to decide how much you want available to spend during retirement. Life expectancy has increased due to improved medical and healthcare practices. The sooner you start planning your retirement the more you’ll have available when the time comes.
For example – if your present age is 30 and your expected retirement age is 60 years – you have 30 years to fund your retirement.
Step 3 – Fill in The Information
There are different pension calculators available online. Do some online research to uncover the best one for you. Basic features online calculators include allow you to calculate income based on certain factors.
Some key inputs
1- Retirement Age – The official age of retirement for salaried is 60 years. However, you can enter the retirement age in online calculators as per your preference.
2- Date of Birth – Enter the date of birth as per your Government ID
3- Annual Income – Fill in the net salary instead of gross salary for better results
4- Savings – If you have any additional savings, please mention in this field
5- Growth Rate – Input the expected rate of growth in the salary
6- Accommodation post-retirement – Mention the nature of accommodation you prefer post-retirement
7- The online calculator on the basis of growth rate decided by you usually estimates applicable interest on the investment
Some online calculators ask you to select inflation rate and can tell you exactly what you need to know concerning savings/investments. Once you fill in the rate you’ll be able to review results based on your input.
The retirement income projections generated by these tools help you improve outcomes post-retirement. All figures generated are illustrative, not definitive, in scope.
End Note
Post-retirement life can be the golden period of life, especially when you intend it so and act on your intention. Through wise planning it becomes the time when you get to do whatever it is you love. So, use online pension calculators to determine your retirement income and invest in a monthly pension plan that assures you a comfortable life post-retirement.
Shift Frequency © 2018 – Educational material