Pension Planning Calculator

Nowadays it has become pretty hard to make a saving, but it is very essential. So to keep track of the betterment of your future you must start saving before your retirement. Using a pension calculation formula or basic pension calculator you can easily evaluate a value that you need to save per month for the betterment of your post-retirement age. But while making your pension plans you might come across many queries for instance how much pension will I get? All of such questions are explained below in detail.

A fund of retirement which an employee receives either from the employer, employee, or both, where usually the employer is covering the biggest contribution percentage. When an employee is retired, the employee is paid in the form of an annuity which is calculated on the conditions of pension. Now if the employee has opted for the commutation of pension then the amount of pension is paid in the form of a lump sum to the receiver. With the help of the pension calculation formula, the total pension you will receive can be calculated. You can even use an online pension calculator to estimate the amount you'll be receiving at the end.

A pension plan calculator or a pension calculator analyzes the total amount you will need to accumulate at the time of your retirement. The pension calculator demonstrates the amount of lump sum and the tentative pension which is expected by a subscriber of an NPS after the age of 60 or after the maturation. This depends on the following factors:

• Monthly regular contributions

• Percentage of the Basic Pension Reinvested corpus to buy an annuity

• Rates of returns of the investment along with the annuity for which it is selected

A monthly pension calculator or pension fund calculator helps you to keep an approximate value of the total amount you require to save per month to financially secure yourself in the future. If you are wondering how to calculate pension amount then by using the online pension calculator you can keep yourself updated. To know how is pension calculated, following the given steps:

1. Search for a basic pension calculator that is available online

2. Fill in all the required personal details such as birth date, accommodation time, and age of your expected retirement

3. Then fill in your income details

4. Finally, input your saving details

Moreover, you can also use another formula to calculate your pension. Let us have a look into it.

Each pension is estimated according to the pension formula which is already set and is free to make the payment on the plan. The retirement calculator of the pension formula is based on the account of your pensionable salary and the total years of your service. In short the longer duration you'll be working and the longer you contribute towards your plan the higher amount of pension you'll be receiving at the end. The basic pension calculator formula used online utilizes the formula:

(pensionable salary × pensionable service)/ 70

If you want to know how to calculate commutation of pension, then the formula is:

Pension commutation formula = Amount of 1 to be commuted x 12 x purchase value for age next birthday. Alternatively, you can also find the table below to ascertain the right commutation value for you. 

Here are the commutation values pension of ₹1 per annum. You can adjust the commutation value according to your income to arrive at the appropriate value. 

The pension plan calculator works on the principle of the power of compounding. By inputting your details on the pension commutation formula or basic pension formula, you will know the aggregated money that you will accumulate after your retirement.

It is necessary to think about the future after your employment. Provident funds and pensions are not quite enough. ULIP Pension Plan available on Bajaj Markets helps you to save for a secured tomorrow. It is a top-rated pension scheme that ensures returns as high as 25% over an investment period of 5 years. It has tax benefits, high AUM (Assets Under Management), the flexibility of choosing among four different investment portfolios, and the least caste structure.

1. NPS- National Pension Scheme

2. Annuity- Fixed amount of income that you are entitled to receive once you subscribe to a pension plan

3. Commutation Pension- It is a portion where the pensioner is paid in the form of a lump sum instead of the pension's periodic payment

4. IRS- Internal Revenue Service

5. Pension- An allowance received by the employee after the retirement

6. Pensionable salary- It is the average salary of the month in the recent 12 months of the service

7. Pensionable service- It is the total years you have been employed till the day you retire

8. Accumulation period- The period in which you invest your savings into your pension plan