Whether you have just begun your career, or are in the midst of it, it is never too early, or too late, to plan your retirement. The sad truth of the matter is that hardly anyone thinks of retirement much in advance, and those who do, are complacent and feel an employment pension and savings will be sufficient. This is far from the reality. Retirement expenses could very well be sky high, and by the time you retire, inflation would have risen by leaps and bounds. Additionally, you must plan for emergencies, not just daily living expenses. While you undertake planning for retirement, a handy tool like a retirement calculator can help you immensely. 

Plan Early

The rule of thumb for retirement planning is to start your planning and strategizing as early as you possibly can. The simple logic behind this is that the more time you have to save and invest, the more you will collect by the time you retire. You are bound to be better off with more time to build a corpus thanks to the advantage of compounding. You can reinvest your interest from any financial investment and earn more interest over that. 

Whether you think of investing in the stock markets after you open a demat account, or sign up for investment plans like a ULIP (giving you life insurance and investment benefits), the earlier you start, the more gains you will achieve. Focus on starting your plan today and take some help with a retirement calculator in the planning stages. It's important to use accurate tools and handy hints for you to plan your retirement as comprehensively as you can. 

Plan Your Finances for Retirement

A retirement savings calculator can be a boon for those planning for retirement. This is an online tool that lets you feed in important data connected with your retirement, like the amount you wish to have for retirement, and the timespan during which you wish to collect that amount. Based on calculations that this near-accurate tool can provide, you are able to have a rough estimate of how much capital you will require for retirement. It's possible for you to gauge amounts you may require for daily expenses, utility bill costs, medicines, amenities, etc. based on your needs today. These actual expenses may rise in your retirement, and you can account for inflation costs and add these to your calculation process. Then, you can get the total of your expenses required for retirement. Of course, you may already have investments, as you may have invested in an upcoming IPO or the stock market, and you need to make a note of income accrued from any of these too. 

Unforeseen Expenses

You must remember that during your retirement, you will not be earning a regular income. Therefore, a routine cash flow will not be present unless you make investments in such a way so as to provide this during retirement. You may invest enough to meet your living expenses during retirement, and even have health insurance plans to take care of medical emergencies. However, what if you need more cash on hand for emergencies? At such times, you don’t want to find yourself burdened with the additional stress of having to rely on children for help. Hence, after you use a retirement calculator for computing your daily living costs, you need to compute potential expenses for any emergencies you may encounter like fatal illnesses, accidents, chronic ailments, etc. 

Compare Financial Instruments and Products

A proficient retirement savings calculator helps you to know about expected returns from different amounts of investment you make generated from various financial products and instruments. As a result, you are able to select financial products that fulfil your individual retirement expense requirements. Such goal-based investing is necessary for retirement, and you can focus on certain instruments while discarding others. Retirement calculators contain features for adding potential inflation rates depending on your time horizon, and this makes it easier for you to find out how much of a corpus you need from a range of financial products. For example, if you are planning to retire in 30 years and you expect the inflation rate to be 6%, you can use an inflation calculator to see how much your money will be worth in real terms in 30 years. This will help you to calculate the amount you must set aside each month in order to meet your retirement objectives.

The Retirement Calculator and Pension Plans

Apart from the pension plan which the majority of employees receive from their employers, pension plans can be opted for by individuals outside of their workplace. If you wish to buy a pension plan, you can do so from banks and certain financial companies. A retirement calculator can aid your choice in the best pension plans on offer, allowing you to enter the amount you need at the maturity of a given plan, and let you know how much you should invest accordingly. 

Define Goals and Get Clarity

A retirement calculator helps you if you are clear about your retirement goals. Each individual has different goals, and if you have clarity about each specific goal to be met, a retirement calculator can help you to know exactly how to allocate your funds to gain particular returns. In this way, you get a clear picture of the amounts you need for fulfilling certain objectives. Retirement calculators can give you information about expenses, investments, savings and the overall creation of wealth. Return advantages of one-time investments can also be known through such tools. 

How Calculations are Made

Retirement calculators and other tools to know about your expenses for retirement can be used on websites and online portals of most banks and asset management companies. You may get to use them on financial apps and brokerage platforms as well. You will have to probably fill in the following details (in most online calculators) to achieve the desired annual income you must get during your retirement: 

• Your current age
• Your expected retirement age
• Your life expectancy
• The estimated rise in inflation (usually gauged at 6%-7% annually)
• Your expected investment return (for pre and post retirement)
• Any current savings

Once you have filled in all these details, the retirement calculator will do its work and calculate the amount of annual income that is required during your retirement. 

Organize and Plan

The only way to make sure you are not stuck in a financial quandary at retirement is to plan ahead of time. With tools like the retirement savings calculator, you have no excuses but save for your retirement. There are several ways you can invest, and the easiest is if you open a demat account and start in a small way with equity. You can also explore any upcoming IPO, and think of long-term plans like ULIPs and other retirement goal-oriented schemes.