rates req for

investment rate income

growth rate in salary yoy based
inflation approach

income to be discounted at real rate of return

ALWAYS INFLATE FOR RETIREMENT KEYWORD:CURRENT EXPENSES

IN THE FIRST YEAR OF RETIREMENT I WILL NEED 1 L PA
1L WILL BE TAKEN AS IT IS
DISCOUNTING FACTOR REAL RATE OF RETURN

ppf, loan and fd no compunding divide the rate by 12 for eg for monthly rate

real ror -
calc pv of insurance
under retiremnt- calc pv of corpus at retirement (when pmt is given)
amt to be withdrawn post riterement
> savings given
> savings and estate diff
pv of any recurring exp (education, vacation) annuity form
calc hlv (through income or exp based method)

RETIREMENT
retirement corpus+savings
retirement corpus given and any other goal is givn --> how much he should save

> how much I can withdraw each month and estate is given - deduct pv of estate from reti
> if estate given and have to calc savings in the pre retirement period
ENT I WILL NEED 1 L PA

ATE OF RETURN

12 for eg for monthly rate

deduct pv of estate from retirement corpus(ie. Fv of investments or pv of retirement corpus)

pv of estate+pv of retirement corpus
ent corpus)
Part 1 Calc of periodic benefit
Life cover 2000000.00
Benefit 1 at her age 30 300000.00
FV of benefit 1 at her age 60 2283676.51 AED2,283,676.51
Benefit 2 at her age 35 300000.00
FV of benefit 2 at her age 60 1628229.79
Benefit 3 at her age 40 300000.00
FV of benefit 3 at her age 60 1160905.34
Benefit 4 at her age 45 300000.00
FV of benefit 4 at her age 60 827709.46
Total value of all benefit at her a 5900521.11

Part 2 Calc maturity value at her age 50

Remaining live cover amt 800000.00
Bonus (simple revisionary) 1840000.00
Final additional bonus 500000.00
Total maturity value at her age 5 3140000.00
FV of maturity benefit at her age 6176855.26

Total corpus at her age 60 12077376.37

Part 3: present value of estat 126856.11

Amount available to use for living 11950520.26

Part 4: amount available to withdraw p.a. Use real rate of return

(₹906,180.63) Always use Bgn mode for expenses
Step 1
30-48 2216036.1
35-48 1245196.5
40-48 703916.93
45-48 383186.74
4548336.2

Total corpus =SB at 48+ death benefit at 48+bonuses-350000

8876336.2

bonus 1678000
Interim bon 500000

Value of corpus at age 60 19991209.802137

(-)pv of 10l 508349.29213472
Amt available to use 19482860.510002

Amt available to withdraw (₹1,477,340.77)

Part 1: Calculate the PV of all the income from her age 33 to 58. since this is also an annuity take the
salary growth rate 10%
ROI 9%
Income horizon 25
income pa 750000
PV of income from age 33 to 58 @3 -INR 20,967,027.22

Taxes and self expenses rate 6%

ROI 9%
Self exp and taxes 150000
PV of expenses from 33 to 58 @33 (INR 2,737,431.68)
economic value -INR 18,229,595.54
s also an annuity take the real ROR as the discounting factor. Replace the inflation with salary growth rate
n with salary growth rate
Part 1: calculate the FV of all investments from 25 to 60. He is currently 30 but has been saving since
Annuity of savings 30000
ROI 8%
Period 60-25
FV of all investments from INR 5,583,064.44

Part 2: PV of retirement corpus needed at 60

retirement however the
discunting factor will still
be the real ror as it is the
annuity of expences) 300000

roi 6%
post retirement period 15
pv of corpus neded @ 60 INR 3,088,495.18
does the investmet corpus suffice? yes as FV is > than PV needed
INR 2,494,569.26
has been saving since 25 therefore the investment period will be 60-25
Part 1: calculate the FV of all investments from 30 to 58.
Annuity of savings 200000
ROI 6%
Period 28
FV of all investments from INR 14,527,959.66

Part 2: PV of retirement corpus needed at 58

however the discunting
factor will still be the real
ror as it is the annuity of
expences) 75000

post retirement period 204

pv of corpus neded @ 58 INR 13,080,231.60
does the investmet corpus suffice? yes as FV is > than PV needed
INR 1,447,728.06

IF SHE HAD TO LEAVE A ESTATE AT 75

INR 3,898,402.73

other way
INR 180,069.77
curren exp ps 325000
4%
585306.639289748
PV of retirement corpus @ 45
roi 7%

years 40
INR 14,182,819.48 need

amount to be saved every y INR 424,864.82 other way

fv of current investments at 45
difference to be cheived through yearly
amount to be saved from 30to 45
stments at 45 2759031.54071533 have
heived through yearly a INR 11,423,787.93 want
ed from 30to 45 INR 424,864.82
SAME AS LAST 4 STEPS OF Q31
retirement period 27
ror 10%
estate 50000000

Total corpus 7800000

pv of estate ###
corpus available to withdra ###
withdrawal p.a INR 392,297.72
Saving time 30
retirement 20
roi 12%
inflation 6%
current spending 240000

expenses 1102750.30519935
pv of expenses (total corpu (INR 13,740,817.19)

amount to be saved monthl (INR 4,459.90)

investment 240000
roi 12%
investment time 30
retirement time 20

part 1
FV of investment at 55 INR 64,870,225.55

part 2
estate at 55 INR 12,974,045.11
value of estate at 75 INR 125,151,441.74
part 3: living expenses
at 55 INR 51,896,180.44
withdrawal amt monthly INR 355,896.76
PART 1
PV of UG @52 INR 2,201,856.05
PV of UG @40 INR 445,158.24

PV of PG @ 56 INR 2,826,205.51
PV of PG @ 40 INR 335,354.70

PART 2: PV of living expenses for wife from 58 to 62 @40

current expenses @ 40 on a monthly basis INR 90,000.00
inflation pre retirement on a monthly basi 0.00486755056534
no. of months from 40 to 58 216
annuity of inflation adj expenses req post INR 192,667.89
PV of exp at 58 INR 8,471,265.99
PV at 40 INR 770,081.27

PART 3: PV of living exp from 40 to 58 @40

pv @ 40 INR 10,704,055.97
TOTAL COVER NEEDED TODAY @ 40 INR 12,254,650.18
retirement period 20
inflation rate monthly 0.45%
ror 12.50%
expenses as on retirement 30693.730299923
pension income 15000
expenses to be accounted f 15693.730299923

retirement corpus required (INR 2,126,037.86)

amount to be saved monthl INR 13,262.06
time till retirement 22
retirement period 35
yearly exp 700000
inflation before retiremtn 6%

inflation adj expenses 2522476.19160485

corpus req at retirement (INR 56,715,821.09)

pv of retiremet corpus from 62 to to 97 INR 27,664,695.93
pv of withdrawal of 150000 @ 55 INR 135,379.06
amt req at 55 INR 27,800,074.99
amount to be saved from 40 to 55 (INR 636,652.64)
fv of 2l investmenrt @ 50
amt invested INR 200,000.00
roi 3.50%
yrs 10
INR 2,428,398.38

corpus required at 60 INR 12,000,000.00

amount invested in equity from 50 to 60 INR 1,214,199.19
roi 11%
yrs 10
fv of amount invested in equity INR 3,447,622.67

fv of amount in debt at 60 INR 8,552,377.33

amount invested in debt as on 50 INR 1,214,199.19
roi 8%
yrs 10
amount invested in debt yearly from 50 to INR 379,087.73
investment repiod 30
retirement period 20
roi 11%

a) accumulated amoount at 60
amt invested INR 6,000.00
INR 15,169,692.38

b) amount he can withdraw during retirement

INR 149,953.04 use real ror, if inflation given

c)
monthly spending INR 130,000.00
pv in case he withdraws o INR 13,151,183.84 use real ror, if inflation given
differencial remaining at 6 INR 2,018,508.54
estate at 80 INR 16,273,844.68
part 1
time period 100
roi 3.33%
pmt 9500
accumulated sum at t+25 INR 7,505,910.51
(-) marriage exp INR 2,500,000.00
amount invested at t+25 fo INR 5,005,910.51
amount he can withdraw du INR 434,210.73
Version for sum 1: Abhishek has been investing Rs. 10,000 since fast 4 years every quarter. He intends to continue with the same investmen
the marrlage of his daughter, the current cost of which is Rs. 500,000. He will again need to withdraw money for his Son's marriage after 2
800,000. Marriage cost escafates at 4.5% p.a. His investments yield him a return of 14% p.a. for next 15 years. invetsment return then subsid
will require Rs. 430,000 p.a. in the 1st year post retirement. He estimates to a period of 20 years post retirement. During his distribution pha
while inflate is estimated at 5.5% b.a. How much more does he need to invest from today till another 15 years (quarterly) so as to fu

time period 76
roi 3.33%
pmt 10000
accumulated sum at t+15 INR 3,430,636.19
wedding cost of daughter INR 967,641.22
wedding cost of son at t+20 INR 1,929,371.22
pv of wedding cost of son at t+15 ###

pv of expenses at t+22 (fund req) INR 6,297,464.35

pv of fund req at t+15 ###

amount req at t+15 INR 4,795,121.51

deficit INR 1,364,485.32
additional amount to be invested every quarter from t to INR 7,164.03
nue with the same investment for another 15 years. After 15 years he needs money for
for his Son's marriage after 20 years from today. the current cost of marriage is Rs.
nvetsment return then subsides to 12.52% p.a. till rettrement. te also estaimates that he
nt. During his distribution phase the investments will earm him a return of 9.25% p.a.,
years (quarterly) so as to fulfill ai his goais. He wili retire in another 22 years.
same as Q9 + extra calc of estate
time period 240
roi 0.95%
fv of savings at 60 INR 13,797,860.34
pv of expenses INR 4,291,138.64
amount available for estat INR 9,506,721.70
estate value at 80 INR 91,704,623.86
expenses inflated for retirement period INR 864,388.48
retirement corpus req INR 13,403,752.61
amount to be saved from 30 to 60 INR 9,455.15
inflation adj expenses at r INR 244,234.47
retirement corpus needed INR 29,664,770.62
amount to be saved every INR 14,274.89
look at modification in the question
corpus at retiurement INR 2,025,179.23
pv of estate INR 76,252.39
withdrawal after retiremnt INR 215,887.53
 0.01
0.07229008085624
inflation adj expenses 101590.648226982 30000 monthly expenses
pv of retiremrnt corpus AED11,101,077.92
pv of estate AED76,252.39
total retirement corpus at AED11,177,330.32
amount to be saved every AED13,797.95
same as q11
retirement period 10
roi 7%
investment period 25
retirement corpus req INR 1,568,545.96
retirement corpus accumul INR 2,030,294.11
surplus INR 461,748.15
retirement period 10
roi 7%
investment period 25
retirement corpus req INR 4,705,637.88
retirement corpus accumul INR 2,030,294.11
deficit (INR 2,675,343.77)

amount that needs to be i INR 3,322.37

inflation adj expenses 748329.294
amount req 561246.971
partial calc of q31
roi 8%
amount 100000
5 yr SB fv AED684,847.52
10 yr SB fv AED466,095.71
15 yr SB fv AED317,216.91
maturity benefit fv AED863,570.00
acc value of investments a AED2,331,730.14
current age 30
retirement age 60
life expectancvy 83
current monthly exp 125000
he needs 15L in current terms after 5 years from today for his own marriage
at the age of 70 he wants to go for a chaardham yatra. The current cost of which is 10L
he also wants to celebrate his 25th marriage anniversary at the age of 60. the then cost is 1.50cr
his father had bought a 25 year money back policy when he was 19 years. The SA is 35L. Simple revis
from the age of 60 to 75 he will require 87% of then expenses. From the age of 75 to life expectancy
inflation till the age of age of 50 for living expenses (pa) 6.50%
thereafter it subsides to 6.35% till retirement 6.35%
from 60 to 75 the inflation is 5.25%
and thereafter it is 4.25%
the nominal ror for all the investments till 50 12.85%
subsides by 1% for the remaining period till retirement 11.8500%
then subsides to 11.5% till the age of 70 11.50%
then subsides to 11.25% till life expectancy 11.25%
marriage cost inflation 4.50%
chardham yatra inflation 5.40%

what is the surplus or deficit at the age of 55. in case of deficit how much amt will he invest on quarte

marriage cost inflated 1869272.90647969

fv of marriage cost at 50 AED11,460,304.65
fv of marriage cost at 55

MONEY BACK

Life cover AED3,500,000.00

Benefit 1 at his age 24 AED525,000.00
FV of benefit 1 at her age 35 AED1,984,616.06
Benefit 2 at her age 29 AED525,000.00
FV of benefit 2 at her age 35 AED1,084,348.00
Benefit 3 at his age 34 AED525,000.00
FV of benefit 3 at her age 35 AED592,462.50
Total value of all benefit at his age 35 AED3,661,426.56
total value deducting marriage cost AED1,792,153.65
fv of above till 50 AED10,987,495.07
benefit 4 at age 39 AED525,000.00
fv of benefit 4 at 50 AED1,984,616.06
MB at 44 AED4,112,500.00
fv of MB at 50 AED8,494,059.36
fv of all benefits at 50 AED21,466,170.48
fv of above till 55 AED37,578,073.92
inflated adj char dhaam yatra cost at 70 8196424.35388708
pv of char dham cost at 60
 bonus 28
29.5
31
32.5
34

en cost is 1.50cr
A is 35L. Simple revisionary bonus is 28 per 1000 SA for the first 5 years, which then increases by 1.5 rs for each
5 to life expectancy (83) he will require 78% of then expenses
pa
pa

l he invest on quarterly basis till 55.

hen increases by 1.5 rs for each interval of 5 years
Q

Answer:
Current age
Retirement age
Life expectancy
Current monthly living expenses
He needs 1500000 in current terms after 5 years from today
At the age of 70 he wants to go to a trip, the current cost is
He also wants to celebrate @60, the then cost is
His father had bought a 25 year money back policy when he was 19 years
The SA of policy
Simple revisionary bonus 28 rs per 1000 SA for the first 5 years
which then increases by 1.5 rs for each interval of 5 years
From the age of 60 to 75, he will require 87% of then expenses
From the age of 75 to 83, he will require 78% of then expenses
Inflation till the age of 50 for living expenses (30-50)
thereafter, inflation subsides to till retirement (50-60)
from 60 to 75, the inflation is
and thereafter it is
Nominal ROR for all investments till 50
ROR subsides by 1% for remaining period till retirement
It then subsides to, till the age of 70
which then subsides to, till retirement
Wedding inflation
Trip inflation
What is surplus/deficit @55?
In case of deficit, how much amt will he invest quarterly from today to 55?

Step 1: FV of insurance proceeds @35

FV of 1st SB received at 24 @35
FV of 2nd SB received at 29 @35
FV of 3rd SB received at 34 @35
Total corpus @35
FV of marriage cost @35
Corpus left @35 after deducting marriage cost
FV of corpus @50
FV of 4th SB received at 39 @50
Maturity Benefit @44
40% of SA
Accrued Bonuses
Total Maturity Benefit Value @44
FV of MB @50
Total corpus @50
Corpus value @55

Step 2: PV of all expenses @55

1) PV of marriage anniversary @55
2) FV of trip cost @70
PV of trip cost @60
PV of trip cost @55
3) PV of living expenses from 60 to 70 @55
i) Inflation p.m from 30 to 50
Inflation adjusted expenses @50
Inflation p.m from 50 to 60
Inflation adjusted expenses @60
Annuity of expenses @60 (PMT)
PV of expenses from 60 to 70 @60
PV of expenses from 60 to 70 @55
ii) Inflation from 60 to 70
Annuity of inflation-adjusted expenses @70 (PMT)
PV of living expenses from 70 to 75 @70
PV of living expenses from 70 to 75 @60
PV of living expenses from 70 to 75 @55
4) PV of living expenses from 75 to 83 @55
Inflation p.m from 75 to 83
Annuity of expenses @75
PV of expenses from 75 to 83 @75
PV of living expenses from 75 to 83 @70
PV of living expenses from 75 to 83 @60
PV of living expenses from 75 to 83 @55

Total Expenses @55

Deficit @55

Step 3: Calculate the amt to be invested quarterly from 30 to 55

Here we will use the Unitary Method as the ROI from 30 to 50 is 12.85%
and from 50 to 55 is 11.85%
Assuming that he will invest 1X from 30 to 50
FV of annuity from 30 to 50 @50
FV of annuity plus the accumulated corpus from 50 to 55 @55
Therefore, 573.84x = Deficit amount. Hence, X= Deficit/573.84
 30
60
83
125000
1500000
1000000
15000000

3500000

NOTE: Bonus is always acrrued, its is given either on death or matu

6.50%
6.35%
5.25%
4.25%
12.85%
11.85%
11.50%
11.25%
4.50%
5.40%

1984616.05774432
1084348.00277003
592462.5
3661426.56051435
1869272.90647969
1792153.65403466
10987495.0714084
1984616.05774432

1400000
2712500
4112500
8494059.35503188
21466170.4841846
37578073.917997
8568628.5562538 (i)
8196424.35388708 I want to know the value of this trp @60 so I will discount it by 11.5% a
2759788.24965405 I want to know the value of this trp @55 so I will discount it by 11.85%
1576506.69368 (ii)

0.005261694276848 Now I will inflate the current expenses of Rs.125000 from 30 to 50 at th

440455.632939723
0.00514362958021
815224.289411408
709245.131787925
₹ 64,827,949.33
₹ 37,032,441.19 (iii)
0.004273127766158 Now inflate the PMT that you have calculate @60 by the above rate for
1183088.97860227 PLEASE DO NOT take 87% of this amount as we have already accounted
62139303.0419441
20922698.8467869
11951922.320832 (iv)

0.003474495003498 Now to take it from 75 to 83, inflation is 4.25%, ROI=11.25

1191852.56047181 Annuity @70 -> inflate by monthly inflation @70 i.e 5.25% and take 78%
₹ 89,465,108.60
52499309.9640827
17676851.819551
10097758.485711 (v)

₹ 69,227,257.25
₹ 31,649,183.33 NOTE:
Unitary method is used when:
1. I have the % of debt and equity, but the amount
2. It is used when I know the future value I want to

343.329640741564
₹ 573.84
55153.5852654945 This amount should be invested quarterly for 25 years, to take care of
₹ 18,935,860.61 Cross-
₹ 31,649,183.33 Check
er on death or maturity
scount it by 11.5% as that is the ROI from 60 to 70
scount it by 11.85% as that is the ROI from 50 to 60

0 from 30 to 50 at the above inflation rate to get the inflation-adjusted expenses @50

y the above rate for 120 months (70-60)*12. This amount then becomes the PMT.
ve already accounted for that

Note that you will take 78% of the 87%

5.25% and take 78% of that amount. N = (83-75)*12

ity, but the amount is not given to me

ture value I want to achieve, but need to find the PMT to achieve that FV.

ars, to take care of all expenses worth ₹69227257.25

current age 35
retirement 60
life expectancy 75
current expenses 300000
inflation 6%
roi 10%
inflation adj exp INR 1,287,561.22
retirment corpus INR 15,093,800.89
amount to be saved INR 139,522.60
retirement corpus 5000000
current age 30
etirement 55
roi 9%
inflation 5%
savings 45000 pa for 10 years
fv of these savings at 40 INR 745,213.20
fv of above at 55 INR 2,714,426.02
remaining retirement corp INR 2,285,573.98
amount to be saved INR 71,416.60
inheritence 250000
years 7
roi 10%
withdrawal INR 4,062.44
current age 30
amount saved 15000
fd roi 8.25%
etiremrnt age 58
life expectancy 80
inflation 5%
retiremnt corpus INR 19,760,612.62
amount she can withdraw INR 103,033.04
value of car at t+4 328186.688
value of car at t+8 345538.805
1577030.92
retirement corpus INR 3,278,926.11
amount to be saved INR 48,450.02
retiremrnt corpus INR 5,487,771.32
amount to be saved INR 59,656.67
education cost after 5 year INR 1,070,580.46
corpus req after 5 years INR 3,124,155.81
amount to be saved INR 123,626.62
current hous 125000 pm what is the additional cover i need to have today?
personal exp 30%
nominal roi 13%
inflation 6%
term cover 1000000.00

pv of expenses 30-60 at 30 AED14,045,859.27 =PV((((1+B3)/(1+B4))^(1/12))-1,(60-30)*12,-B1*(1-B

pv of expenses 60-80 at 60 AED34,119,540.24 =PV((((1+B3)/(1+B4))^(1/12))-1,(80-60)*12,-(B1*(1-
pv of expenses 60-80 at 30 AED872,267.85 =PV(B3,(60-30),0,-C8,1)
sum of all expenses AED14,918,127.12 =C7+C9
cover required AED13,918,127.12 =C10-B5
need to have today?

-1,(60-30)*12,-B1*(1-B2),0,1)
-1,(80-60)*12,-(B1*(1-B2))*((1+B4)^30)*0.5,0,1)