The Philosophy of this Tool

This tool is designed to do more than just calculate numbers. It's built to give you confidence. We believe retirement isn't about stopping work; it's about achieving **Financial Freedom**—the point where work becomes a choice, not a necessity. It’s the freedom to pursue what you want, when you want, knowing your financial needs are secure.

The Three Properties of Money

Understanding your money is the first step to mastering it. All money, whether it's a rupee, a dollar, or a digital token, has three fundamental characteristics:

1. Store of Value

Money should retain its purchasing power over time. A thousand rupees today should be able to buy a similar amount of goods tomorrow. Inflation is the primary enemy of this property.

2. Medium of Exchange

Money is the tool we use to transact. It's what you give to the grocer for vegetables or to a client for your services. It eliminates the need to barter.

3. Unit of Account

Money provides a common measure of value. It allows us to price a car, a house, and a loaf of bread in the same terms, making financial planning and comparison possible.

Our Calculation Thesis: How it Works

Transparency is key to confidence. Here is the step-by-step logic our tool uses to project your financial future:

  • 1. The Impact of Inflation: This is the most critical factor. We apply the annual inflation rate you provide to your **expenses** every single year, starting from the year after your current age. A ₹50,000 monthly expense today will be significantly higher in 20 years, and our tool accounts for this compounding effect. Your post-retirement income streams (pension, freelance) are treated as nominal (not inflated), as requested.
  • 2. The Accumulation Phase (Pre-Retirement): For each year until your retirement age, your income is your salary. We calculate your year-end corpus using the formula:
    Ending Corpus = (Starting Corpus - Lumpsum Expenses for the year) + Annual Savings + Investment Growth
  • 3. The Withdrawal Phase (Post-Retirement): After you retire, your income from your job stops. For each year, we calculate your cash needs and how you'll meet them:
    • First, we add up your passive income (Pension + Freelance).
    • Then, we calculate your total expenses for that year (inflated recurring + lumpsum).
    • The Net Cash Flow = Passive Income - Total Expenses.
    • Your corpus for the next year becomes: Ending Corpus = Starting Corpus + Net Cash Flow + Investment Growth.
  • 4. A Note on Your Primary Residence: Your primary home's value contributes to your **Total Net Worth**. For the purposes of calculation, it is treated in two distinct ways:
    • It is **NOT** included in the "Investable Corpus" used for projections, as it doesn't generate liquid income for your retirement expenses. This ensures a more conservative and realistic plan.
    • However, its full value **IS ADDED** to your final liquid corpus at the end of the plan to determine your "Final Net Worth." This final net worth figure is what we use to check if you have met your **Inheritance Goal**.
  • 5. The End Goal: The projection continues until your specified Life Expectancy. The "Final Net Worth" shows what you are projected to have left, including your home. The plan is considered successful if this amount is positive and meets your inheritance goal.