How long your retirement corpus will last at a specific withdrawal rate/amount?
Use this calculator to find how long your retirement corpus will sustain at a specified withdrawal amount or withdrawal rate.
Annual Withdrawal Rate (p.a.)
Retirement Corpus will exhaust at the age of
Retirement withdrawal calculator
Many of you plan for a comfortable retirement when you are working. If you are a salaried employee, your EPF contributions build up a retirement fund and if you are self-employed you create your own fund. When creating a retirement fund, however, do you measure its sufficiency?
Though many individuals create a retirement corpus, the corpus often falls short in meeting their financial requirements in the golden years. That is why when planning for retirement, you should know exactly how long would your planned corpus last and what you can do to make the corpus last longer. Do you know how to find that?
Measuring the sufficiency of the retirement corpus
You can calculate how long your retirement corpus would last by estimating the specific amount of withdrawal done from the fund after you retire. This withdrawal symbolises the money which you would need post retirement to meet your financial requirements. When you factor in the withdrawal rate from your corpus, you can find the time for which your retirement fund would last.
The calculation of the time based usage of your retirement corpus would need you to factor in some important details. You should, first, consider the retirement corpus which you have at your disposal. Thereafter, you would have to figure out the amount of withdrawal, the rate of inflation, the return on your debt and equity investments, life expectancy, any annual income that you receive after retirement and the allocation of equity and debt assets in your financial portfolio. When you factor in these details into your computation, you can find out up to what age would your retirement corpus last at a specified withdrawal amount. The calculated age can also be changed by changing the withdrawal amount or any of the other details which were considered in the calculation.
Calculating the age up to which your retirement corpus lasts gives you an insight as to whether your retirement corpus is sufficient or not. If the corpus gets used up early, you can increase the corpus or reduce the withdrawal amount. This calculation can also be used as a back calculation to calculate the optimal retirement corpus. After you have calculated your retirement fund, you can check its sufficiency by finding out how long the fund would last. Thus, the calculation serves a dual purpose and is a good way of ensuring the sufficiency of retirement planning.
The calculation requires good mathematical formulas to work out the utility of the retirement fund. If you find such formulas difficult or if you are unsure about their usage you don’t have to worry. We at Orowealth offers you a Retirement Withdrawal Calculator which lets you do the calculations at ease. All you need to do is provide the variables into the calculator and the calculator calculates and displays the results instantly. After calculation the calculator shows you the age up to which your retirement funds would last if you withdraw a specified amount every month. It is simple, easy and quick and you also get the assistance of our experienced team for planning for your retirement.
Investing your retirement corpus
The retirement funds can be invested in a mix of equity and debt mutual funds which would give you good returns. Since the returns on your investments would also affect the life of your retirement fund, you should choose the maximum interest yielding avenues. Mutual funds are one of those avenues which give the best returns both in the equity as well as debt market. You can, therefore, choose mutual fund investments for your retirement.
So, calculate the life of your retirement corpus and double proof the sufficiency of the funds which you are creating for your life after retirement. If the funds do not last long, step up your investments or reshuffle your portfolio but ensure that your retirement fund lasts your lifetime.