1. Timeline
The model uses your current age, selected retirement age and planning age. Calculations between retirement and the planning age are performed monthly.
2. Expense modelling
In Quick Estimate, the planner applies your selected retirement-spending percentage to today's monthly expense and then inflates it over time.
In Detailed Planner, each expense can use one of four rules:
- Continue: the expense remains through the plan.
- End at age: the expense is included until the chosen age and then becomes zero.
- Change at retirement: the expense is multiplied by the percentage you specify once retirement begins.
- Start at retirement: the expense begins only once retirement starts.
Categories can be assigned to general, healthcare, lifestyle or education inflation. Those inflation rates are user-entered assumptions.
3. Inflation
Amounts entered in Detailed Planner are treated as today's rupee amounts. For a cash flow occurring in a future month, the model compounds the relevant annual inflation rate from the current age to that month.
Different categories can therefore grow at different assumed rates.
4. Retirement income
Pension, rental income and annuity income can begin at a chosen age. The amount entered is treated as the monthly amount when that income starts, then grows using the annual increase you specify. Retirement income reduces the amount that must be withdrawn from the investment portfolio.
5. One-time retirement goals
One-time goals are entered in today's rupees, assigned to an age and inflated to that point in time. Examples include a vehicle replacement, renovation, family support or a medical reserve.
6. Required retirement corpus
The planner builds the net monthly cash flow after retirement:
Each future monthly withdrawal and one-time goal is discounted back to the retirement date using the post-retirement return assumption. The present values are added together, then the selected safety buffer is applied.
7. Projected assets at retirement
Existing retirement savings are compounded using the pre-retirement return assumption. Current monthly retirement contributions are projected as a monthly recurring investment until retirement. The model compares those projected assets with the required corpus.
8. Funding gap and monthly investment
If projected assets are below the required corpus, the difference is the funding gap. The planner also estimates the total monthly investment that would be required from today, under the selected constant return assumption, to reach the modelled target. “Additional monthly investment” subtracts the monthly contribution you already entered.
9. Portfolio path
The retirement portfolio chart begins with the calculated corpus, subtracts each month's net withdrawal and goals, and applies the entered post-retirement return. It is a deterministic path. It does not simulate market volatility or sequence-of-returns risk.
10. Important limitations
- Returns and inflation are assumed rather than predicted.
- The model does not automatically calculate taxes, investment fees or product-specific rules.
- Healthcare and longevity can differ materially from assumptions.
- Market returns do not occur smoothly each month in real life.
- Results can change substantially when assumptions change.
For consequential financial decisions, consider reviewing the assumptions with an appropriately qualified financial, tax or legal professional.
Build a plan around your own assumptions.
Use Quick Estimate for speed or Detailed Planner to model expenses that end, rise or change after retirement.