Retirement planning has become a priority for many as it helps them plan their expenses, investments and gather enough corpus by the time they retire. Making wise investments, and sticking to budgets could make your retirement a hassle-free one. Retiring in comfort with no worries is possible if you plan your retirement well. With Bankbazaar's retirement calculator, you can get a deep knowledge of how much you need to invest to comfortably retire.
What is a Retirement Calculator?
A retirement calculator is a tool which is available on Bankbazaar's website. This will require you to enter a few details like your age and monthly expenses. The tool will calculate the total amount of money you would need by the time you retire. With Bankbazaar's retirement calculator, you can plan your savings and investments, and eventually gather the corpus you would need at the time of retirement.
Benefits of a Retirement Calculator
- A retirement calculator allows you to determine the various investment opportunities which you can capitalise on.
- The tool helps you to calculate approximately how much money you have to save every month so that you can retire with a decent amount.
- The calculator helps you for exigencies, in case you have any high-value expenses or plans after you retire.
- Bankbazaar's retirement calculator lets you determine retirement planning strategies which you can compare.
- A retirement calculator comes in handy especially when you feel that you are short on time, and have to take quick and efficient investment decisions.
Comparison of Various Retirement Plans in India
National Pension Scheme (NPS)
- This scheme allows you to make investments throughout your employment.
- You can redeem 60% of your corpus during the retirement.
- When you make an investment in NPS, it is qualified for a tax deduction up to Rs.1.5 lakh (Section 80C) and Rs.50,000 (Section 80CCD(1B)).
Employees Provident Fund (EPF)
- EPF, which is under the Employees Provident Fund Organization of India (EPFO) offers retirement benefits for all salaried employees.
- 12% of your basic salary will be invested into the EPF account.
Public Provident Fund (PPF)
- If you are looking for a long-term investment plan, then Public Provident Fund is the right step forward.
- The returns from this fund are being regulated by the Finance Ministry.
- The interest will be paid to you annually (on 31 March).
- An investment into PPF will qualify for a tax deduction (Section 80C).
Fixed Deposits (FDs)
- Fixed deposits with banks are the safest investments you can make.
- This investment will qualify for a tax deduction (Section 80C up to Rs.1.5 lakh).
- The interest you earn will be paid out on a monthly or quarterly basis. You can also choose the get the entire amount credited on maturity.
- You can create a fixed deposit ranging from 5 years or 10 years.
Atal Pension Yojana (APY)
- APY is a deferred pension plan.
- The scheme was launched for the unorganized sectors.
- You need to be between 18 years and 40 years of age and have a savings bank account to be eligible for this plan.
- There are 5 plans you can choose from, and these plans will get you a guaranteed pension of Rs.1,000, Rs.2,000, Rs.3,000, Rs.4,000 and Rs.5,000.
Mutual Funds
- Mutual fund investments for a long period can help you as the element of compounding comes into play.
- If you combine this with SIP (Systematic Investment Plan), you can multiply the benefits.
- Keep in mind that investing in equities is worth the risk as it helps in accumulating the corpus that you would require.
| National Pension Scheme (NPS) | Employees Provident Fund (EPF) | Public Provident Fund (PPF) | Fixed Deposit (FD) | Equity Mutual Funds | |
| Interest rates | 8% to 10% | 8.50% | 7.10% | 5.5% to 7.75% | 12% to 15% |
| Lock-in period | Until you retire | You can close your EPF account when you leave a job. This account can be transferred while shifting jobs. | 15 years | 5 years | There is no lock-in period. |
| Risk | Market-related risks | Low risk investment | Low risk investment | Low risk investment | Market-related risks |
Tax Benefits of Various Retirement Plans in India
| National Pension Scheme (NPS) | Employees Provident Fund (EPF) | Public Provident Fund (PPF) | Fixed Deposit (FD) | Equity Mutual Funds | |
| Investment | Tax-free-Section 80c and 80d | Tax-free - Section 80c | Tax-free- Section 80c | Tax-free- Section 80c | Tax-free - Section 80 |
| Maturity | 60% is tax free. 40% will be taxed during the year in which you get the amount. | Tax-free post 5 years after account opening. | Your interest and maturity amount will not be taxable. | TDS on interest will be taxable (according to income tax slab) | 10% tax on long-term capital gains |
FAQs on Retirement Calculator
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What is the retirement age that is set in India?
After taking into account the life expectancy of people, the government and private companies in the country have set the retirement age as 60 years.
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What is the lock in period for ELSS (Equity Linked Savings Scheme) funds?
ELSS (Equity Linked Savings Scheme) funds come with a lock-in period of 3 years.
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Within how many years can I withdraw money from my PPF account?
Once you invest in PPF, your money will be locked in for 15 years.
