Your Wealth.
Better Understood.

Common assumptions

Version 2.0. Money is in nominal rupees unless labelled “today’s rupees”. Annual investment returns are nominal assumptions, divided by 12 for monthly compounding. Returns are constant and non-negative in this model, not guaranteed. Actual volatility and sequence-of-returns risk are not simulated. Annual inflation is compounded once per year. Figures are rounded for display; calculations use full precision.

Financial wellness: an educational rubric

This is a weighted checklist, not a scientifically validated diagnosis. Cash-flow surplus = income − living expenses − EMIs, before investments. Expenses exclude EMIs and contributions to avoid double counting. Savings rate is this surplus divided by income; it is not the unspent balance after investing. Debt-to-income is EMI / income. Emergency months = accessible reserve / (living expenses + EMI); zero outgo is shown as unavailable.

• Cash-flow surplus: 20 points, reaching full weight at a 20% surplus rate.
• Debt: 15 points, linear from full weight at no EMI to zero at 40% debt-to-income.
• Emergency reserve: 20 points, reaching full weight at six months of outgo.
• Investment habit: 15 points, reaching full weight at 20% of income.
• Existing investments: 10 points, reaching full weight at one year’s income.
• Life cover: 10 points, reaching full weight at 10 times annual income.
• Health cover: 10 points, reaching full weight at ₹5 lakh.

All components are clipped to their weight; the sum is rounded to 0–100. Categories: 80–100 stronger foundation, 60–79 building resilience, 40–59 areas to review, 0–39 needs attention. Insurance thresholds are illustrative scoring benchmarks, not coverage advice. Dependants, exclusions, assets, job stability, tax, suitability and personal circumstances require a broader review. Age is context, not a scoring penalty. With zero outgo, emergency points are 20 only if an accessible reserve is reported; coverage in months remains unavailable.

SIP and annual step-up

At monthly rate r = annual return / 12, balance at month m is previous balance × (1+r) + contribution. Contributions occur at month-end. The contribution is initial SIP × (1+step-up)^floor((m−1)/12). A fixed SIP has future value P × ((1+r)^n−1)/r; at zero return it is P × n. No taxes or fees are deducted.

SWP

Withdraw at the beginning of each month, then grow the remaining balance at r. Withdrawal increases annually, starting in month 13. Withdrawals are capped at available capital; any unmet requested withdrawal is reported, and the corpus never becomes negative. A depletion month is the first month ending with no corpus. Amounts are gross: no tax, exit load or fees are modelled. Withdrawals may include your capital and are not interest or assured income.

Goals, inflation and a simplified tax scenario

Future target T = today’s cost × (1+inflation)^years. Existing savings E and monthly SIP P grow with monthly compounding. If a is the ordinary-annuity factor, gross future value F = E(1+r)^n + Pa. The illustrative tax is t × max(F − E − Pn, 0), payable only at final redemption. Existing savings are assumed to have a current cost basis equal to their value. Required SIP = max(0, (T − after-tax future value of E) / ((1−t)a + tn)). At zero return a=n.

The entered effective tax rate is hypothetical, not a tax slab or a statement of Indian tax law. Exemptions, holding periods, asset categories, cess, surcharge, loss offsets, indexation, tax deferral and changes in law are excluded. A budget is optional; without one, projections use the calculated SIP. “Total contributions” includes existing savings. Use a qualified tax professional for actual liabilities.

Retirement cash flows

Expenses at retirement W = today’s monthly expense × (1+inflation)^years-to-retirement. For N retirement months, required corpus at retirement is the sum from k=0 to N−1 of W × (1+inflation)^floor(k/12) / (1+post-return/12)^k. First withdrawal is immediate at retirement; subsequent expenses rise at each retirement-year anniversary. This discounted monthly model works with post-retirement returns below, equal to or above inflation without a division by their difference.

Existing corpus and month-end contributions compound until retirement. Additional monthly SIP = positive shortfall / annuity factor. If retiring now, show the shortfall needed now instead of an impossible SIP. The model funds only the chosen retirement duration, leaves no intended inheritance and excludes pensions, taxes, fees, one-off health costs and market volatility. The drawdown chart uses only current planned contributions, not the additional SIP.

References & risk note

Investor.gov: compound-interest concepts ↗ · Mirae Asset Mutual Fund: SWP explainer ↗. The formulas and thresholds above are the actual implementation; external resources provide general context.

Calculations are illustrative estimates based on user-provided assumptions. Market-linked investment returns are not guaranteed. Actual results may differ. These tools provide education, not personalised investment or tax advice, and do not imply that Investo Experts is a SEBI-registered investment adviser. Existing service-role disclosures apply.