How to Use an SIP Calculator to Plan Your Dream Retirement?

Planning to create a comfortable retirement with your SIP investments? Then you need to create a financial plan beforehand. Retirement planning is a crucial life step that should be taken after careful calculations and thorough consideration. With the help of the SIP calculator, you will be able to know the numbers to put as an investment to get the best return to live a comfortable life post-retirement. 

What is the SIP Calculator?

An SIP calculator is an online tool that helps calculate the estimated returns you will receive by investing a certain amount in mutual funds. The tool is designed to provide you with an estimate of your investments; however, the actual amount of return may vary depending on various factors, such as market conditions and changes in the SIP amount. It should also be noted that the SIP calculator does not provide clarification on exit load or expense ratio (if there is any).

How to Use the SIP Calculator? 

Here is the step-by-step guide to using the SIP calculator to estimate how much you should invest for your retirement. 

• Step 1: Determine the amount you would like to have post-retirement before starting any calculations. It is essential to make calculations based on your financial goals. 
• Step 2: Go to the SIP calculator page of your trusted financial broker’s website. 
• Step 3: Now, enter the monthly investment amount that you are willing to invest in the SIP in the calculator. The greater the amount, the bigger the returns you will receive. 
• Step 4: Next, set your investment period in the calculator. It is the time duration for which you will be making monthly SIP payments. 
• Step 5: Now, enter the expected return percentage in the calculator. Percentage is a crucial calculation element, as different mutual funds have different interest rates. 
• Step 6: After entering all three numbers, you will get your results. The amount shown will be your total investment value, including both corpus and returns. 

Based on the numbers, you can plan your investment and mutual fund plans that you want to invest in. 

Why Is the SIP Calculator Beneficial?

Here is why using the SIP calculator is beneficial for achieving the results you need for your retirement planning. 

Realistic Financial Planning

With the help of the SIP calculator, you can make a strategic financial plan that will give you realistic results. The numbers you put in the calculator and the result will give you an estimated idea of how much your investment will grow. 

Customisation and Goal Alignment 

Everyone has a different retirement number set for their retirement; the SIP calculator helps you customise your investment plans as per your different criteria. Whether you want to retire in 40 years or at 60 years, you can enter the number and get the exact value you need to invest as per your retirement plan. 

Compare Investment Options

The biggest advantage of using the SIP calculator is that you can compare various investment options and choose as per your requirements. Whether you are planning to invest in mutual funds or shares, you can adjust the amount, expected returns, and number of years to check the effect of various factors on your corpus. 

Summing Up

A SIP calculator is a valuable tool that helps you create your ideal retirement plan. It helps you visualise your investment growth, track your progress, and make any necessary changes throughout the journey. You can easily access it on your trusted broker’s website and get started with your retirement planning.