Top 5 Financial Planning Calculators for Easy Financial Planning

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Introduction

Financial planning is not an abstract exercise. To accurately account for your life goals and to make it easier to achieve your targets, it is important to be as precise and certain about your financial plans as possible. In other words, financial planning involves a lot of numbers.

For most people, this can be intimidating. In fact, having to crunch up some huge numbers to create the right investment plan can be one of the key factors that hold people back from getting started on their financial journey.

But today, thanks to the evolutions of information technology and fintech solutions, we have several beginner-friendly online calculators that make financial planning much easier for the average investor.

How do calculators help with financial planning?

Let's list out some important metrics for you –

  • Your retirement fund
  • The amount of life insurance cover you need
  • The amount of health insurance you need
  • The wealth you need to create to achieve your life goals
  • The amount you need to save up to fund your child’s higher education a few years from now

To find these metrics accurately, there are several numbers involved. Making these calculations manually can be tedious at best, and may prove to be full of errors at worst. Here is where financial calculators can be your new best friends.

Online tools like a life insurance premium calculator, a HLV calculator, or a retirement planning calculator can help you figure out the exact amount you need to invest or save up for different financial needs. Calculators like these help with financial planning by making the entire process smooth and error-free. Plus, they help you save time and money in the process.

Today, there are a wide range of financial calculators available for free online. Check out the top 5 online calculators that can make financial planning much easier for you.

  • HLV calculator

    One of the main components of your financial portfolio is life insurance. It helps you be better prepared for any uncertainty that life may throw your way. But how do you know what the right amount of coverage for your needs is?

    Well, that amount is what we call the Human Life Value (HLV). It is the present value of all the income you expect to earn in the future, till you retire. Alternatively, it can also be described as the present value of the future needs and liabilities of your family.

    What is the HLV calculator?
    The HLV calculator is an easy-to-use online tool that can help you estimate the total amount of life insurance coverage you need. By using this calculator, you can make sure that you purchase a life insurance plan that gives you the exact amount of coverage needed to meet your life goals and financially secure your family's future.

    Here are some of the parameters used to determine the Human Life Value, based on the income method:

    • Your current income
    • Any expected increase in income
    • Your outstanding loans
    • The number of years left till you retire

    The HLV can also be calculated using the need-based method, with the help of the following factors:

    • Your current expenses
    • Any expected increase in income
    • Your outstanding loans
    • The number of years left till you retire

    Why do you need it?
    A Human Life Value calculator is an essential financial planning tool, because it helps you protect your family with the optimal life insurance coverage. Without an adequate financial safety net to rely on, your loved ones may be financially helpless in case something unexpected were to happen to you. They may be unable to meet their everyday needs, manage the debts in your name, and achieve their life goals as planned.

    You can ensure that none of these pitfalls occur by simply purchasing adequate life insurance coverage. And a HLV calculator gives you more clarity on what this magic number is.

  • Child's Future Planning Calculator (CFPC)

    If you’re married and have children in your life, you’ll agree that no matter what you’re doing at any given moment, the future of your kids is always in your thoughts. After all, it is natural for parents to want to secure their children’s future and equip them for their life in the best way possible.

    As a parent, if you are looking for the solution to bridge the gap between merely dreaming of a bright future for your children and actually making that a reality, we have two words for you - financial planning. A Child's Future Planning Calculator (CFPC) is highly relevant here.

    What is the CFPC?

    The Child's Future Planning Calculator (CFPC) is another online calculator that you can use for free online. It helps you determine the amount you need to save to meet the specific goals you have for your children’s future.

    The Child’s Future Planning Calculator helps you plan for the two major goals in your child’s future - namely their education and their wedding. For each of these goals, the child plan calculator takes different factors into account.

    Here’s a list of the parameters the Child’s Future Plan Calculator uses to compute the amount of funds needed for different goals.

    The savings needed for your child’s higher education, calculated taking into account the following factors:

    • The current age of your child
    • The stream of education your child wishes to pursue for higher education, if applicable (like science, commerce or arts)
    • The city in which your child will pursue their higher education

    The savings needed for your child’s graduation or post graduation, calculated taking into account the following factors:

    • The current age of your child
    • The career or course that your child aims to pursue (like doctor, engineer, architect, designer, etc.)
    • The country in which your child will study

    Other common factors that affect the amount you need to save for your child’s education (irrespective of the stage):

    • The current estimated cost for your child’s education
    • The age at which your child will need the funds for their education
    • Your existing total savings
    • The amount you are already saving monthly to meet this goal, if any
    • The expected rate of return from your investments

    The savings needed for your child’s wedding, calculated taking into account the following factors:

    • The current age of your child
    • Your child’s age at which you expect to host your child’s wedding
    • The current estimated expenditure for your child’s wedding (as of today)
    • Your existing total savings
    • The amount you are already saving monthly to meet this goal, if any
    • The expected rate of return from your investments

    Why do you need it?
    Any miscalculation in planning for your child’s future could prove to be a costly mistake. For instance, if you do not have the funds needed for your child’s education, they may not be able to pursue the course they are passionate about. Or, if you have not saved up for their wedding, they may not be able to experience the wedding of their dreams.

    A Child’s Future Plan Calculator shows you early on how much you should save, so these goals can be achieved effortlessly. Based on the number the calculator arrives at, you can purchase a child insurance plan to meet the costs of these major milestones.

  • Wealth calculator

    Saving can only get you up to a certain point in life. To truly make all those grand dreams on your list come true, you will need to invest to create wealth. Investing helps you gain from any increase in the value of the asset you invest in.

    Wealth creation can ensure that you meet your big ticket life goals, such as buying a new house or a new car, creating an inheritance, starting your own business, or just about any other goal that requires a huge outlay of funds.

    What is the wealth calculator?
    A wealth calculator is an online tool that can help you figure out how much money you need to achieve your dreams. Unlike the other calculators in this list, a wealth calculator can be used to compute the wealth needed for a variety of different goals.

    Here's a preview of some of the goals that you can plan for with the help of this online tool, and a closer look at the parameters used to compute the wealth needed for each goal.

    The wealth needed to buy a new house, calculated after taking into account the following factors:

    • The city you live in
    • The value or price the house will be worth
    • The time period within which you would like to achieve this goal
    • The person(s) you wish to share this goal with (spouse, children, parents, etc.)
    • Your existing total savings
    • The amount you are already saving monthly to meet this goal, if any
    • The expected rate of return from your investments

    The wealth needed to buy a new car, calculated after taking into account the following factors:

    • The value or price the car will be worth
    • The time period within which you would like to achieve this goal
    • The person(s) you wish to share this goal with (spouse, children, parents, etc.)
    • Your existing total savings
    • The amount you are already saving monthly to meet this goal, if any
    • The expected rate of return from your investments

    The wealth needed to start your own business, calculated after taking into account the following factors:

    • The city you live in
    • The total costs you expect to incur to achieve this goal
    • The time period within which you would like to achieve this goal
    • Your existing total savings
    • The amount you are already saving monthly to meet this goal, if any
    • The expected rate of return from your investments

    You can also use the wealth calculator to compute the amount of wealth you wish to build up in general, for no specific purpose. You may need this corpus to lead a comfortable life and to maintain your standard of living despite inflation in the coming years.

    Why do you need it?
    A wealth calculator is often overlooked in the presence of other online tools, because it may not seem like a priority for many individuals to build wealth right after they begin working. But the earlier you begin, the more you can take advantage of the power of compounding. Plus, it always helps to have a clear number in mind before you start investing for a particular purpose.

    Using a wealth calculator can give you this clarity. You can modify the parameters as you see fit, and leave room for some margin if you wish to play it safe. The biggest advantage of a wealth calculator is that you can use this tool to plan for various life goals.

  • Retirement planning calculator

    Retirement planning is not an exercise you should put off till your 40s or 50s. Although the big day may seem very far away when you’re in your 20s, it is important to start building your retirement fund as early in life as possible.

    But how do you know the size of the retirement corpus you will need to live comfortably after you’ve retired? After all, there are numerous factors that you need to take into account, and several assumptions you will have to make before deciding on the size of the retirement fund that will be adequate for you and your family. Here’s where a retirement planning calculator can help.

    What is the retirement planning calculator?
    A retirement planning calculator is another free online tool that helps you ascertain the amount of money you need to save up to retire comfortably. Knowing this amount is pivotal to creating your retirement plan, because only when you know how much you need to save up can you choose the right investments for the end goal.

    Here is a list of the top parameters that a retirement planning calculator takes into account to compute the amount you need to save up for retirement.

    • Your current age
    • The age at which you wish to retire
    • Your gender
    • Your current monthly income
    • Your current monthly expenses
    • The amount of savings you already have in your name
    • The expected rate of return from your investments

    Why do you need it?
    Without having a fair idea of the amount of money you need to sustain yourself after you retire, you run the risk of not having an adequate retirement fund. This can prove to be a costly mistake, because if your retirement corpus is not enough to get you through your post-retirement life, you may have to either reduce the standard of living, or return to work.

    Both these options are cumbersome. And it is better to be safe than sorry. This is why it is essential to have a clear goal about the right size of your retirement fund. Once you know this number, you can plan your investments accordingly, and ensure that you can retire comfortably at the end of your career.

  • Health plan calculator

    Medical costs are on a rise on account of inflation. And while you may be in the best of health today, there is no way to ascertain what the future holds. An unexpected medical emergency or diagnosis can prove to be a costly affair.

    A health insurance plan can help you be better prepared for such contingencies. It covers the costs of diagnosis, doctors’ visits and consultations, hospitalization, medical treatment, and more. In return for your health insurance cover, you need to pay a premium to the insurer.

    What is the health plan calculator?
    A health insurance plan calculator helps you ascertain the amount of health insurance coverage you will need to secure your future financially. It can help you figure out if your existing cover is sufficient, or if you need additional protection.

    Typically, a health insurance plan calculator takes into account the following factors –

    • Your age
    • Your marital status
    • Whether or not you have been diagnosed with any major illness in the past 3 years
    • The average life expectancy
    • Your monthly income
    • Your existing coverage

    Why do you need it?
    Being uninsured or underinsured both pose their own risks. Without sufficient health insurance coverage, you may find yourself facing unexpected medical bills that are too steep to pay out of pocket. This could land you in debt, or you may be forced to withdraw your investments to meet the costs of healthcare.

    But a health insurance plan calculator can help you avoid all these pitfalls by simply showing the optimal amount of coverage you should have, based on your requirements and your financial situation. You can then make use of this information to purchase a health cover that is adequate for your needs and the needs of your family.

Conclusion
Together, these online calculators take care of the key aspects of every financial plan, namely life insurance, your children’s future, wealth creation, retirement planning and health insurance. And as they say, well begun is half done. So, by simply using these free online tools before you create your financial plan, you can make your estimates and your investments more accurately and get the right start to planning for your future.

Read next: How to build your personal finance portfolio?

When it comes to financial planning, online calculators like the tools outlined above can be of great help. However, it is also essential to know how you can use the information from these online tools to build your personal finance portfolio in a smart and prudent manner. As it turns out, we have a blog that takes you through the steps involved in creating your portfolio efficiently and in the right manner.

Read it here

A BIG PART OF YOUR FINANCIAL PLAN IS ALL ABOUT SECURING YOUR FAMILY’S FUTURE. THERE IS A TERM INSURANCE PLAN TO HELP YOU DO JUST THIS!

The ABSLI DigiShield Plan helps you give your loved ones the gift of financial security in the face of uncertainty. You can use the HLV calculator to check the amount of coverage needed.

And then, with the help of this term insurance plan, you can get the protection your family requires - because there is no limit on the maximum sum assured under this policy.

What’s more, you have 10 different plan options to choose from, and each option has its own unique advantages. Check out these options today and get your affordable term insurance plan online.

Know More

ABSLI DigiShield Plan (UIN 109N108V08) is a non-linked non-participating individual pure risk premium life insurance plan; upon Policyholder’s selection of Plan Option 9 (Level Cover with Survival Benefit) and Plan Option 10 (Return of Premium [ROP]) this product shall be a non-linked non-participating individual life savings insurance plan.
ADV/4/22-23/148

Author

Term Products

ABSLI Life Shield Plan

A term insurance plan that offers you the flexibility of plan options suitable for your family's non- negotiable goals and ensure they need not compromise on their lifestyle. UIN: 109N109V06

  • Choice of 8 plan options
  • Cover your spouse under the same policy
  • Longer Life cover till age 85

ABSLI DigiShield Plan

PROTECTING multiple life needs with one plan is now possible. UIN 109N108V08

  • 10 Plan Options to suit your varied protection needs
  • Flexible death benefit pay-out options
  • Life insurance cover for 1 year or till age 100 yrs

ABSLI Saral Jeevan Bima

A simple plan to protect your family’s financial future (UIN 109N128V01)

  • Simple & affordable plan
  • Flexible premium paying terms
  • Enhance insurance cover with rider

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