How to use the pension calculator?
By considering the following factors, you can easily calculate if you are savings are sufficient and if your savings are on track or not:
1. Entering the Date of Birth:
For record keeping purposes, individuals are required to provide their date of birth before purchasing a policy. The date of birth you are going to enter, to calculate pension, should be the same as the one on the government ID.
2. Choosing a Retirement age:
Instead of the official retirement age provided by the government, individuals can enter whichever year they would like to retire at. You can choose 40, 50 or even 70 to be your retirement age while calculating your pension. This option of choosing a retirement age is particularly for those individuals who voluntary want early retirement or are self-financed.
3. Entering Annual income:
While entering the annual income in the pension calculator, it is recommended to enter the net income and not the gross income. This is because your employer might have given you some fringe benefits that you may not have actually received.
4. Entering your Personal Savings:
The personal savings you have till date are required to be entered in the pension calculator. The savings include all cash savings, investment in various instruments such as fixed deposit, recurring deposit, saving schemes etc.
5. Accommodation after Retirement:
After retirement, what will be the nature of your accommodation? Would you want to live in a house owned by you or would you prefer living in a rented apartment? In the pension calculator, you are required to enter the type of accommodation you prefer post retirement in the pension calculator.
Why is Retirement Planning Necessary?
The points below describe exactly why it is necessary for you to calculate your pension and plan for your retirement beforehand:
· Due to advancement in medical and healthcare facilities with the development in science and technology, life span has increased. Therefore, gathering funds to live a long healthy life is necessary for individuals after retirement.
· The pension calculator can help you save funds in order to support your family in the future.
· To live a tension free life after retirement, self-maintained retirement fund is necessary because the pension funds provided by the employer is never sufficient.
· For uncertain situations, it is necessary to have sufficient funds in advance because the country doesn’t have an efficient social system.
· After retirement, every individual wants to fulfil his or her dreams. To do so one needs to plan for retirement before in order to have enough funds for the fulfilment of dreams.
Generally, a lot of people procrastinate when it comes to save for the future and plan for retirement. By using the pension calculator, we can live a hassle free happy life easily by getting to know the amount of money we will have to save for life after retirement.