Goal Planning Calculator
Estimate the future cost of your financial goal and calculate the investment required to achieve it.
Goal Planning Details
Goal Planning Summary
What is a Goal Planning Calculator?
A Goal Planning Calculator is a financial planning tool that helps users estimate the future cost of a financial goal after considering inflation and calculate the investment required to achieve that goal.
The calculator also considers existing savings already allocated to the goal and estimates how those savings may grow until the selected goal date.
How to Use the Goal Planning Calculator?
- Enter the current cost of your financial goal in the Goal Amount Today field.
- Select the number of years remaining until you want to achieve the goal.
- Enter the expected annual inflation rate.
- Enter any Current Savings already allocated specifically to this financial goal.
- Enter the expected annual return on your Current Savings.
- Enter the expected annual return on the new investments you plan to make.
- The calculator will instantly estimate the Future Goal Cost, Future Value of Current Savings, Funding Gap, Required Monthly Investment and Required One-Time Investment Today.
Understanding the Goal Planning Calculation
The calculator first estimates how much your goal may cost in the future after applying the entered inflation rate for the selected Time to Goal.
It then estimates how much your Current Savings may grow by the goal date using the entered expected return on those savings.
The Future Value of Current Savings is subtracted from the Future Goal Cost to calculate the remaining Funding Gap.
The calculator then estimates the monthly investment required to accumulate the Funding Gap by the goal date using the expected return entered for new investments.
It also calculates the one-time amount that would need to be invested today at the entered expected return on new investments to potentially accumulate the Funding Gap by the goal date.
Why Use a Goal Planning Calculator?
- Helps estimate the future cost of financial goals after considering inflation.
- Takes existing savings into account before calculating additional investment requirements.
- Shows the estimated remaining Funding Gap.
- Estimates the monthly investment required to achieve the financial goal.
- Shows an alternative estimated one-time investment requirement.
- Allows users to compare different inflation rates, investment periods and expected return assumptions.
Frequently Asked Questions
What does Goal Amount Today mean?
Goal Amount Today is the estimated current cost of the financial goal. For example, if higher education costs ₹25 lakh today, ₹25 lakh can be entered as the Goal Amount Today even if the goal is several years away.
Why is inflation included in the calculation?
Inflation can increase the cost of goods and services over time. The calculator uses the entered inflation rate to estimate how much the goal may cost at the end of the selected Time to Goal.
What does Current Savings for Goal mean?
Current Savings for Goal means money that is already saved or invested specifically for the financial goal being planned. The calculator estimates the future value of these savings and uses it to reduce the remaining Funding Gap.
What happens if my Current Savings are already sufficient for the goal?
If the estimated Future Value of Current Savings is equal to or greater than the Future Goal Cost, the Funding Gap becomes ₹0. In that situation, the Required Monthly Investment and Required One-Time Investment Today are also shown as ₹0.
How is the Required Monthly Investment calculated?
The calculator estimates the monthly investment required to accumulate the Funding Gap over the selected Time to Goal using monthly contributions and the entered Expected Return on New Investment.
When are monthly investments assumed to be made?
For estimation purposes, this calculator assumes that monthly investments are made at the end of each month. This is an ordinary-annuity assumption. Actual investment timing and returns may differ.
What is Required One-Time Investment Today?
Required One-Time Investment Today is the estimated amount that would need to be invested immediately and allowed to grow at the entered Expected Return on New Investment until the goal date to potentially cover the Funding Gap.
Are the calculated results guaranteed?
No. The calculated results are estimates based on the values and assumptions entered by the user. Actual inflation, investment returns, taxes, costs and market conditions may differ from the assumptions used in the calculation.