How a lumpsum and retirement calculator can be helpful?

lumpsum and retirement calculator

Last Updated on March 12, 2024 by admin

Financial calculators like lumpsum and retirement calculator are the supporting pillars to the world of mutual funds as they help to plan investments, and they are trustworthy and transparent. It is like a friend of the investor that helps them make the right choices, informed decisions and arrive at conclusions for long term investment plans.

Mutual fund investments are gaining immense popularity, especially in the recent times, due to the benefits such as professional management, hassle free investing and power of compounding. Online mutual fund is the primary reason why more and more potential investors are choosing this way to start investing their hard-earned savings and let it grow. It is convenient as with time, patience and the right financial advice, mutual funds can help one complete their desired financial goals. There are various methods for starting this form of investment, that one can choose based on their frequency of income, goals, tenure, etc.

One of the most popular methods, among them, is SIP or systematic investment plan. The other one is a different side to the same coin, called as lumpsum investing. In the former, one can make customised periodic investments, over a time period and in the latter, there is a bulk or one time investment involved.

In case of lumpsum investing, it is supported by the lumpsum calculator. This online tool gives one estimated results based on basic inputs such as amount of investment, time period, estimated rate of return. Once entered, it gives out the results in seconds, that helps investors make an informed choice on type of mutual fund schemes to invest, how to invest, and more. Lumpsum calculator can be understood better with this example –

Suppose Roshan decides to make a one-time investment of Rs 5 lakhs in an equity mutual fund for a period of 8 years. Then, suppose the rate of return is 12% p.a., the estimated corpus for Roshan would be Rs. 12,37,982. Due to power of compounding, his invested money has multiplied over the years, thus giving him a substantial corpus for his use in the future during emergencies or otherwise.

Although people get confused here and also search for a lumpsum SIP calculator, there is no tool as such in that name. They are separate tools – lumpsum calculator and SIP calculator.

Another crucial way of using financial planning is to plan one’s retirement. As Benjamin Franklin said, ‘If you fail to plan, you are planning to fail’. Through early investments one can build a retirement fund that will help you sustain your needs in the later part of your life.

Retirement planning is ideally a lifelong process which includes strategizing, allocating, saving and investing, to finally reap the benefits when you are no longer working. In this context, a retirement calculator can help.

How does a retirement calculator work?

To use a retirement calculator, you need to know a few basic inputs like your current savings, expected inflation, amount you wish to have when you retire, expected rate of return from your investments, etc. Once you know these, the retirement calculator tells you how much you should invest per month, ideally to reach the desired retirement goal amount.

Financial planning can be intimidating but not with tools like lumpsum and retirement calculator. It makes the investing process a cakewalk and instils confidence in new investors as well.

Apart from that, if you are interested to know about Rate of Return on Your Retirement Savings then visit our Finance category.

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Sophia Anderson is a finance writer and blogger with a passion for helping people improve their financial literacy. With over 5 years of experience in the finance industry, Sophia has worked with individuals, families, and small businesses to provide financial advice and guidance. Her expertise includes budgeting, saving, credit management, and debt reduction. Sophia is dedicated to breaking down complex financial concepts into easy-to-understand language and empowering her readers to make smart financial decisions. She is a frequent contributor to financial publications and has written extensively on topics such as personal finance, investing, and financial planning. Sophia's mission is to help people take control of their finances and achieve financial security and freedom. When she's not writing, Sophia enjoys hiking, practicing yoga, and reading personal finance books.