7 Step On How Retirement Calculator Should Be Used

retirement calculator

Retirement is the time we all have been saving up for or working as hard as possible to sit back and relax when we get retired. But how are you going to calculate how much you will be left with when you retire? For that retirement, the calculator is there to help you. 

A retirement calculator is a set of steps of calculations that include your income, expenses, investment, corpus, funds, etc. With the step-by-step process of the retirement calculator, you have a clear vision of how much more you need to earn. So without spending time on the introduction, let’s move further to these retirement calculator steps. 

7 Steps Of Retirement Calculator

Split Current Monthly Expenses Into Two

Retirement Calculator

Grocery, clothing, house maintenance, utility bill, gifting, etc., are regular expenses that will continue even after retirement. However, other expenses like children’s education, traveling to work, professional clothing are expenses likely to stop by the time you retire. So when computing with a retirement calculator, only consider your regular items. 

Calculate Expected Income After Retirement

Retirement Calculator

This step of the retirement calculator is to calculate your income from all sources. Include all income like pension from the company, income from any insurance plan, pension under the EPS from EPFO, etc. Other than this, you also have to include income from property that you will continue in your retirement. 

Calculate Net Income Needed In Retirement

Calculate the net requirement and deduct the value in step 2 from the step 1 value. For example, if all the expenses are Rs 50,000 a month and your income is Rs 25,000, you need Rs 25,000 more. 

Calculate The Future Value Of The Additional Income Output

The additional you will need during retirement might appear small now. But it will increase with time due to inflation. So instead of taking the current low inflation, one should calculate it with future expected inflation. 

Calculate The Retirement Corpus Needed At 60

It is a bit complex as it depends on the life expectancy, returns expected, and asset allocation. Since life expectancy is regularly increasing, everyone should plan for longer retirement age. 

Find Out How Much Have You Accumulated

Like most people, you might accumulate some corpus dedicated for retirement with the help of various instruments like PPF, EPF, NPS, or any other investment. Add off of these to know how much your current cost is for retirement. 

Calculate The Growth Of Corpus

This step is to calculate the growth of your current corpus, and the growth will be higher for younger people dying to the power of compounding. Along with this, you will also have to calculate any additional corpus. 


This is how your retirement calculator should work, where you calculate all of your expenses and income. After doing all of the calculations above, you have to see how much you are expected to save. And even if you know this earlier at a young age, you have a secure retirement. The best advice to give the young generation is to start investing more and as soon as you can. 

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