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Casestudyvijay

This document contains a personal profile for Mr. Vijay, his wife Karuna, and daughter Kavita. It outlines their income, expenses, investments, loans, retirement benefits, and goals of funding Kavita's education and marriage. Goals are expected to increase by 9% and 6% respectively. The family wants to retire at age 55 and require life insurance. Assumptions provide expected returns, inflation rates, and post-retirement income. The solutions section will calculate lump sums and SIP amounts needed to achieve the goals and any retirement funding gap, as well as the recommended life insurance amount.

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51 views2 pages

Casestudyvijay

This document contains a personal profile for Mr. Vijay, his wife Karuna, and daughter Kavita. It outlines their income, expenses, investments, loans, retirement benefits, and goals of funding Kavita's education and marriage. Goals are expected to increase by 9% and 6% respectively. The family wants to retire at age 55 and require life insurance. Assumptions provide expected returns, inflation rates, and post-retirement income. The solutions section will calculate lump sums and SIP amounts needed to achieve the goals and any retirement funding gap, as well as the recommended life insurance amount.

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Copyright
© © All Rights Reserved
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Personal profile:

Mr.Vijay (35 years)

Mrs. Karuna (30 years)

Both have life expectancy of 80 years

Ms. Kavita (7 years)

Post-tax income : ₹ 4,50,000

Has loans out-standing ₹ 20,00,000

Current living expenses of family ₹ 2,50,000. (80% of which is adequate for retirement purposes)

Has total investments of current value ₹ 25,00,000

Expected retirement benefits ₹ 30,00,000

Goals

1. Ms. Kavita’s education expenses (Current cost ₹ 2,50,000) after 10 years. The cost of
education is expected to increase @ 9%.

2. Ms. Kavita’s marriage expenses (Current cost ₹ 4,00,000) after 15 years. The cost of marriage
expenses is expected to increase @ 6%.

3. Plans to retire at the age of 55 years.

4. Life Cover he needs to take

Assumptions

1. Return on investments for education and marriage goals @ 12%.

2. Return on investments for insurance calculations 8%

3. Inflation 5%

4. Post-retirement rate of return @ 9% and Pre-retirement rate of return @ 12%.

5. Do not consider available investments for achieving these goals, All goals to be achieved by
new investments.

Solutions:
Mode :Begin

Goal Goal Amount Expected Lumpsum SIP amt


Return
1 Child Education
2 Child Marriage

Mode :Begin

Retirement Planning
Retirement Corpus needed
Retirement Benefits Expected
Gap to be achieved
Lumpsum for The Gap
SIP to achieve the Gap

Life Insurance
Ideal Insurance
Current Financial Investments
Insurance cover to be bought

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