Retirement is a phase of life that requires preplanning, and planning for it is one of the most crucial decisions you’ll ever make. Investment in mutual funds is one of the popular and great ways of building wealth over time and helps you plan your retirement corpus. However, estimating how much you need to invest at the start to get returns in the future can be pretty challenging. Fortunately, with the help of online calculators, investors can conveniently get an estimate and, calculate their future earnings and help you plan your investments.
In this article, we’ll learn how to use the online calculator to plan our investments and practical tips for maximising its use.
Contents
What is a Mutual Fund (MF) Calculator?
An MF calculator is an online financial tool that helps investors calculate the potential returns on their investments and determine future value. Whether you choose the lump-sum method or the SIP (Systematic Investment Plan), the calculation is based on variables, including investment period, tenure and the amount.
Benefits of funds calculator:
- Helps in setting financial goals by providing an estimate of returns from the investments.
- Investors can adjust the variable to make a comparison and choose the right investment amount and scheme.
- It helps to understand whether lump-sum or SIP will be better to align your investment with your goals.
- It eliminates the need to make manual calculations and saves users time and effort.
- The calculator is easy and convenient to use, making it accessible to everyone.
Steps to Use a Mutual Fund Calculator
Follow the below steps to successfully use the MF online calculator:
- Know Your Retirement Goal: Assess your retirement goal and identify the amount you need. Be sure to consider factors such as inflation, leisure activities, living expenses, and more.
- Choose an Investment Mode: If you plan to invest a one-time amount, choose a lump sum, and if you plan to invest monthly, quarterly, half-yearly, or annually, go with SIPs. For long-term investments, many investors choose SIPs due to their compounding benefits, and they can adjust the sum in between.
- Enter Input Details: The estimated mutual fund returns can be calculated by entering the following inputs:
- Investment Amount: The amount you are planning to invest, SIP or lump-sum.
- Expected Rate of Return: Add the percentage of return you have estimated.
- Investment Duration: The period you are planning to invest.
- Calculate and Review: Submit the details and calculate the investment return. The website will display results in seconds. Align the numbers with your financial goals, and make sure to understand that these numbers may change as per the market fluctuations.
Tips for Maximising the Benefits of the Online Calculator
Consider the following tips to maximise the benefits of the MF calculator:
- Ensure to stay realistic when calculating the returns. Use historical and expert advice before estimating the investment returns.
- Calculate factors such as inflation before you set your retirement goals and plan to make investments.
- Make adjustments as per the market fluctuations and trends by periodically reviewing your profile.
- If you are a first-time investor, take the advice of a professional and develop your retirement plan accordingly.
Conclusion
It is concluded that an online calculator is one of the most important financial tools, helping investors make informed decisions related to their investments. It empowers you to make the right investment decisions, track progress, make adjustments and align your investments with your financial goals.
Trusted platforms like Bajaj Finserv have MF calculators that are super easy to use, give accurate estimations, save users valuable time and effort from manual calculations, help them make future goals, and quickly modify different parameters to analyse different scenarios.
By utilising the tool, adopting a disciplined investment strategy, and adhering to the tips mentioned above, you can maximise your investments and secure your retirement.