Investors have varied financial goals, based on how they want their future to look. The goals also depend on a variety of factors such as current status, lifestyle, children, education, and more. While for someone the goal might be to save up, invest and create wealth for a new house, for others it might be to create wealth for funding their child’s education. Whatever the goal might be, there are tools available online to help an investor navigate the area of mutual fund investing.
In this context, we can highlight a tool useful for lumpsum investing called the lumpsum calculator. Lumpsum investment means a onetime parking of a certain sum of money in mutual funds, over a certain period of time, to let it remain invested and grow with the market conditions. It is usually chosen by those investors who have a certain sum of money available in bulk to invest and some financial goals to complete over the long term.
For a better understanding of what yield lumpsum investments can give you, a lumpsum calculator is used. Suppose, you invest an amount of Rs. 1 lakh in a certain mutual fund, over a period of 20 years. Then, assuming the rate of return to be 12% p.a. ,the estimated corpus after the time frame would be Rs. 9,64,630. This calculation was done in seconds using the lumpsum calculator, freely available online. This tool is helpful for new investors in understanding what is expected out of the investment process and how they should park their funds for achieving certain future financial goals.
Speaking of goals and financial planning, retirement planning is also something every investor must do, in order to have a worry-free future, when it comes to financial stability. A retirement calculator is a powerful tool that can help you estimate the amount of money you’ll need for a comfortable retirement. Whether you are just starting to save for retirement or are already well on your way, using a retirement calculator can provide you with essential insights to ensure you’re financially prepared for your golden years.
Before using a retirement calculator, you need to gather all relevant financial information. This includes:
Current age: Your current age is a crucial factor as it determines the number of years left for retirement planning.
Retirement age: The age at which you plan to retire is vital in calculating the time horizon for your retirement savings.
Current savings: Take stock of your existing retirement savings, including individual retirement solutions like NPS, PPF or EPF etc.
Annual income: Your current annual income is an essential factor in determining how much you can contribute to your retirement savings each year.
Expected retirement expenses: Estimate your future expenses during retirement, considering factors such as living expenses, healthcare, travel, and leisure activities.
Post gathering the above information, here are the steps you can take for understanding how to plan your retirement better-
- Choose a suitable retirement calculator.
- Input your data.
- Analyse the results.
- Experiment with scenarios.
- Account for unforeseen circumstances.
- Periodically review and adjust.
A retirement calculator is an indispensable tool for achieving financial security during your golden years. Remember that planning for retirement is an ongoing process, and periodic reviews and adjustments are necessary to ensure you remain on the path to a financially secure retirement.
In this read, our focus has been to highlight two useful financial calculators for investors, namely the retirement calculator and lumpsum calculator. Both have their own use cases which is beneficial for those looking to plan a one-time investment in mutual funds for their retirement.