An AGE on which you are going to be retire from your work duties.

(In The Indian context it can be assumed between 57 to 65 years.)

The amount of expenses that you incur currently on monthly basis.

(In The Indian context and for an average middle class family of 4 members living in an semi urban area, we can assume it between Rs.35000 to Rs.75000. However it is recommended that you calculate your own current expense and use that for calculation.)

Different asset classes can deliver varying levels of returns for any given investment horizon. The following matrix can help you with the same

Debt Asset Class - Between 7% to 9% .
Ideal investment horizon is very short to medium term (few months to say 5 years)

Equity Asset Class - Between 10% to 15%.
Ideal investment horizon is long to very long term (say over 5 years)

You may partly invest in both to get an appropriate asset allocation for your investment horizon.

This represents the increase in your savings on year on year basis in percentage term. We should assume a savings rate (at least 5 to 10% higher) for a salaried person.

If any investment is already done for this goal - retirement planning - then take Total Investment Amount based on those investments.

(if there is no investment earmarked for retirement then keep it ZERO.)

If there is any investment earmarked for this goal - retirement planning - then use Expected Rate of Return that can be generated on those investments.

(The Rate of Return can vary depending on the Financial Instruments in which investment is done. Very Broadly it can be bifurcated in two asset classes - Equity and Debt. Considering these Asset Classes, the Rate of Return can be assumed at 7% - 9% for Debt Asset Class and 10%-15% for Equity Asset Class.)

It is a rate of interest that borrower has to pay on his Principal amount / Loan Amount to institution from which he/she borrowing money.

Note: In this it is assumed that Interest Rate is of Fix nature and not floating one.

Inflation is generally inferred from the measure of CPI which represents the price rise in the general basket of goods & services used in consumption but may not be representative of the rise in overall living costs. We should assume a higher rate of inflation (at least 2 to 5% higher) for retirement, considering its nature and also adjusting for the gradual rise in your living standards as we age.

Inflation is generally inferred from the measure of CPI which represents the price rise in the general basket of goods & services used in consumption but may not be representative of the rise in overall living costs. We should assume a higher rate of inflation (at least 2 to 5% higher) for retirement, considering its nature and also adjusting for the gradual rise in your living standards as we age.

Retirement Kitty is the amount that you will get at the time of your Retirement Age. And for Returns on Retirement Kitty, you need to use Expected Rate of Return on Investment of that Retirement Kitty.

(The Rate of Return can vary depending on the Financial Instruments is which investment done. Broadly investment can be bifurcate in two asset classes and considering the Asset Class, the Rate of Return can be assumed at 7% - 9% for Debt Asset Class and 10%-15% for Equity Asset Class.)