Retirement Calculator Pakistan: How Much You Need to Retire

How much do you need to retire in Pakistan?

The retirement calculator answers two questions: how much money you need on the day you retire to keep your current lifestyle until the age you plan for, and how much you need to save every month from now to get there. It allows for inflation, which in Pakistan has often been high enough to halve the value of money in eight to ten years, and for the return your savings earn before and after retirement.

How it is calculated

First, today's monthly expenses are grown at the inflation rate until retirement. Then the calculator works out the lump sum that can pay those expenses, still rising with inflation, for every year from retirement to the end age, while the remaining money keeps earning the expected return. Your existing savings are grown to retirement, and the shortfall is turned into a monthly saving using the same return.

Example

A 35-year-old who spends Rs 150,000 a month, plans to retire at 60 and wants the money to last to age 80, with Rs 20 lakh already saved, 9% inflation and 13% return: by 60 the same lifestyle costs about Rs 1,293,462 a month. The retirement pot needed is about Rs 22.52 crore. The existing savings grow to about Rs 4.25 crore, so the monthly saving needed is about Rs 81,332.

Starting age makes the biggest difference

The same plan (retire at 60, Rs 150,000 a month in today's money, 9% inflation, 13% return, nothing saved yet), started at different ages:

Ways to close the gap

• Start earlier, even with a smaller amount.
• Raise the monthly saving with every salary increase.
• Use tax-efficient routes such as Voluntary Pension Schemes (VPS), which can also earn a tax credit.
• Hold growth assets such as equities for the long term, and move gradually to safer assets as retirement approaches.
• Count pension, provident fund and gratuity amounts in "saved so far".

Related: SIP calculator, compound interest calculator, salary tax calculator, and all calculators.

The calculator runs in your browser and nothing you type is saved or sent anywhere. Results are estimates for planning and education, not investment, tax or religious advice.

Frequently asked questions

How much money do I need to retire in Pakistan?

It depends on your spending, inflation and returns. For example, someone aged 35 spending Rs 150,000 a month today would need about Rs 22.52 crore by 60, assuming 9% inflation and 13% returns.

What inflation rate should I use?

Pakistan's CPI inflation has averaged roughly 8% to 12% a year over long periods, with spikes much higher. Using 8% to 10% is a reasonable planning range; test a higher figure too.

What return should I assume on retirement savings?

A mix of equities, bonds and deposits has historically earned more than inflation in Pakistan. A real return (after inflation) of 3% to 5% a year is a cautious planning assumption.

Is VPS good for retirement?

Voluntary Pension Schemes let you invest in equity, debt and money market sub-funds and can earn a tax credit on contributions, within limits set by the tax law.

Does the calculator include my provident fund?

Add your provident fund, gratuity and pension savings to "saved so far" so they count towards the goal.