What Will Your Current Monthly Expenses Be Worth in the Future? Calculate Your Retirement Corpus with Ventura’s Retirement Calculator

When planning for retirement, one of the most common questions is: What will my current monthly expenses be worth in the future?

An expense amount that seems manageable today may grow significantly over time due to inflation. Retirement calculators, like the one offered by Ventura Securities, help estimate how much you need to save to maintain your lifestyle after retirement.

Understanding Inflation and Time Value of Money

What is Inflation?

Inflation is the rise in the price of goods and services over time. It increases living costs, meaning the same amount of money will buy less in the future.

What is the Time Value of Money (TVM)?

The Time Value of Money is a financial principle stating that money available today is worth more than the same amount in the future. Money invested today can earn returns, while inflation increases future expenses.

How Inflation Affects Monthly Expenses By The Time

If your current monthly expense is ₹50,000, its future value, considering 6% inflation, can be calculated using the formula:

Future Value (FV) = Present Value (PV) × (1+i)^n

Where:

• PV = Current monthly expense (₹50,000)
• i = Expected inflation rate (6% or 0.06)
• n = Number of years

So, if retirement is 30 years away, your current ₹50,000 monthly expense will be equivalent to roughly ₹2.87 lakh in future terms.

Ventura’s Retirement Calculator Guides You to Save and Invest for a Secure Financial Future

Ventura’s retirement calculator is designed to give personalised insights into how much to save and invest. It considers both pre-retirement and post-retirement returns.

Here are the inputs required:

1. Current Age – Your present age (e.g., 30).
2. Retirement Age – The age you wish to retire (e.g., 60).
3. Life Expectancy – The number of years you expect to live post-retirement (e.g., 75).
4. Expected Inflation for Expenses – Rate at which your expenses will rise (e.g., 6%).
5. Returns Before Attaining Financial Independence – Expected returns from investments before retirement (e.g., 12%).
6. Returns After Attaining Financial Independence – Expected returns after retirement (e.g., 9%).
7. Existing Investments – Current retirement savings or investments.
8. Current Monthly Expenses – Present lifestyle expenses (e.g., ₹50,000 per month).

Based on these inputs, the calculator projects your future monthly expenses at retirement and calculates the retirement corpus required to maintain the same lifestyle.

Example: Rahul Plans His Retirement

Rahul, 30 years old, understands the game of rising inflation — that the expenditure he has today will not be the same worth in 30 years, it will definitely increase. He decides to use Ventura’s Retirement Calculator to plan his retirement to cater for his old age expenses with the following inputs:

• Current Age: 30
• Retirement Age: 60
• Life Expectancy: 75
• Expected Inflation: 6%
• Current Monthly Expenses: ₹50,000
• Returns Before Retirement: 12%
• Returns After Retirement: 9%

In this scenario, as per Ventura’s Retirement Calculator, Rahul may need a corpus of ₹4,28,27,885 at retirement to meet his expenses for 15 years after retirement. To reach this goal, the calculator suggests a monthly SIP of ₹12,133 based on his investment timeline. His current annual expenses are ₹6,00,000, but after 30 years, at retirement, they are expected to rise to ₹34,46,095 due to inflation.

Over the 15 years from age 60 to 75, the total nominal expenses would sum to around ₹5.25 crore. At first glance, this seems higher than his retirement corpus of ₹4.28 crore. However, the key factor is that the corpus continues to earn returns even while he withdraws funds. With a post-retirement expected return of 9% per year, Rahul can set up a Systematic Withdrawal Plan (SWP) and withdraw ₹34.46 lakh annually. Each year, while he withdraws this amount for living expenses, the remaining corpus continues to earn interest at 9%.

This compounding effect reduces the pressure on the principal, allowing the same corpus to generate sufficient growth to cover withdrawals over the 15-year period. In other words, although the total withdrawals in nominal terms are ₹5.25 crore, part of this is funded by the returns generated from the invested corpus. Therefore, a corpus of ₹4.28 crore invested at 9% is sufficient to provide ₹34.46 lakh per year for 15 years, demonstrating how systematic withdrawals and post-retirement returns can effectively meet long-term retirement needs even when total expenses appear higher than the initial corpus.