This application helps you calculate the capital needed to fund your retirement and the monthly savings required to reach that goal, considering a portfolio with multiple assets.
PARAMETERS TO ENTER:
- Monthly Pension Needed (€): The monthly amount you wish to receive during retirement.
- Retirement Period (years): Number of years you expect to need this income.
- Annual Rate of Return (%): Estimated annual return rate on your investments.
- Savings Period (years): Number of years you plan to save before retirement.
- Current Savings (€): Your current accumulated capital (optional).
PORTFOLIO ASSETS:
You can add up to 5 different assets to your portfolio. For each asset, enter:
- Name: A descriptive name for the asset (e.g., "Stocks", "Bonds", "Real Estate").
- Expected Return (%): The expected annual return rate for this specific asset.
- Volatility (%): The expected annual volatility (standard deviation) for this asset.
- Weight (%): The percentage of your total portfolio allocated to this asset. The sum of all weights must be 100%.
RESULTS:
- Capital Required: Total capital to accumulate to fund your retirement.
- Monthly Savings: Amount to save each month during your savings period.
- The graph shows the evolution of your capital during both accumulation (savings) and decumulation (retirement) phases.
REMARKS:
- The rate of return is adjusted for inflation, thereby accounting for the preservation of purchasing power.
- As a result, the constant monthly instalments implicitly include an increase in line with the inflation rate.
- Consequently, if the average nominal rate of return you expect from your investments is x%, and you estimate the average inflation rate to be y%, then the rate of return to enter into the simulator is: r = (x − y)% (an approximation that makes the calculation easier to do mentally).
- Financial investments for retirement savings are generally tax-exempt.