Basic Financial Plan

for you & your family

Prepared for

Mr. R. Nandakumar

Prepared by
Arjun M
Financial Plan 01/25/2022

Child 1's Higher Education & Marriage

Assumed rate of return 13% ###

Inflation of Education & Marriage 8% ###

Child 1's Age 0

GOAL Age Current Cost Future Value Lump-Sum SIP

Class 11 16 0 0 0 0

Class 12 17 0 0 0

18 5,00,000 0 0 0

Graduation 19 0 0 0

20 0 0 0

21 5,00,000 0 0 0
Post
Graduation
22 5,00,000 0 0 0

23 0 0 0

24 0 0 0

25 0 0 0

26 10,00,000 0 0 0
Marriage
27 0 0 0

28 0 0 0

29 0 0 0

30 0 0 0

TOTAL 0 0

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Financial Plan 01/25/2022

Child 2's Higher Education &Marriage

Assumed rate of return 13% ###

Inflation of Education & Marriage 8% ###

Child 2's Age (+) 0

GOAL Age Current Cost Future Value Lump-Sum SIP

Class 11 16 5,00,000 0 0 0

Class 12 17 0 0 0

18 10,00,000 0 0 0

Graduation 19 0 0 0

20 0 0 0

21 5,00,000 0 0 0
Post
Graduation
22 5,00,000 0 0 0

23 0 0 0

24 0 0 0

25 0 0 0

26 10,00,000 0 0 0
Marriage
27 0 0 0

28 0 0 0

29 0 0 0

30 0 0 0

TOTAL 0 0

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Financial Plan 01/25/2022

Insurance
Contingency

I strongly recommend you to keep sufficient amount (generally amount equivalent to 3 to 6

months' of your all regular expenses) in investment instruments where your money
remains liquid (i.e. any time you can withdraw money) and safe.

Health

To safeguard your financial assets and future goals against any

medical emergency I recommend you to take family floater health 3,00,000
cover of amount:

Life

To make sure your children's higher education and marriage goals are
0
achieved, your spouse will need this amount now

To be able to continue with current lifestyle & household expenses till

1,13,97,539
life expectancy, your spouse will need this amount now

Total Life Insurance Cover Required 1,13,97,539

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Financial Plan 01/25/2022

Total Life Insurance Cover Required 1,13,97,539

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Financial Plan 01/25/2022

RETIREMENT PLANNING
DATA INPUT & ASSUMPTIONS

Current Age 32

Retirement Age 60

Life expectancy 80

Household & Lifestyle Expenses (Today's value) 25,000

Inflation per annum 8%

Tax slab you will be falling into post retirement 10%

Expected return on investments (from now till retirement age) 15%

Expected return on investments (from retirement age till life

10%
expectancy)

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Financial Plan 01/25/2022

OUTPUT / RESULTS

No of years left for retirement 28

Years after retirement 20

1st Month Expense Post Retirement 2,15,678

1st Year Expense Post Retirement (Inflation adjusted post- 25,88,132

tax value)

1st Year Expense Post Retirement (Inflation adjusted pre-tax 28,75,702

value)

Retirement Corpus required 5,01,94,911

Fund you must set aside at retirement age to get your

35,26,962
capital back

Total Retirement Corpus required 5,37,21,872

Lump-Sum Savings required 10,73,029

Monthly Savings required (Fixed SIP) 12,678

Monthly Savings required (Growing SIP @10%) 5,461

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Financial Plan 01/25/2022

Post Retirement Cashflows

Inflation Adjusted Inflation Adjusted
Age / Year Year End
Pre-Tax Post-Tax
Years Opening Balance Balance
Withdrawal Withdrawal
61 5,01,94,911 28,75,702 25,88,132 5,18,61,853
62 5,18,61,853 31,05,758 27,95,182 5,34,36,679
63 5,34,36,679 33,54,219 30,18,797 5,48,90,377
64 5,48,90,377 36,22,556 32,60,301 5,61,89,531
65 5,61,89,531 39,12,361 35,21,125 5,72,95,778
66 5,72,95,778 42,25,350 38,02,815 5,81,65,190
67 5,81,65,190 45,63,378 41,07,040 5,87,47,586
68 5,87,47,586 49,28,448 44,35,603 5,89,85,775
69 5,89,85,775 53,22,724 47,90,452 5,88,14,704
70 5,88,14,704 57,48,542 51,73,688 5,81,60,513
71 5,81,60,513 62,08,425 55,87,583 5,69,39,489
72 5,69,39,489 67,05,099 60,34,589 5,50,56,891
73 5,50,56,891 72,41,507 65,17,356 5,24,05,660
74 5,24,05,660 78,20,828 70,38,745 4,88,64,977
75 4,88,64,977 84,46,494 76,01,845 4,42,98,657
76 4,42,98,657 91,22,213 82,09,992 3,85,53,382
77 3,85,53,382 98,51,991 88,66,791 3,14,56,725
78 3,14,56,725 1,06,40,150 95,76,135 2,28,14,966
79 2,28,14,966 1,14,91,362 1,03,42,226 1,24,10,671
80 1,24,10,671 1,24,10,671 1,11,69,604 0

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 Financial Plan 01/25/2022

Post Retirement Cashflows

Capital
Protection
Amount
35,26,962
40,56,006
46,64,407
53,64,068
61,68,678
70,93,979
81,58,076
93,81,788
1,07,89,056
1,24,07,414
1,42,68,526
1,64,08,805
1,88,70,126
2,17,00,645
2,49,55,742
2,86,99,103
3,30,03,969
3,79,54,564
4,36,47,749
5,01,94,911

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Financial Plan 01/25/2022

Retirement Corpus Utilization

70000000

60000000

50000000

40000000

30000000

20000000

10000000

0
61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80

Age / Years Year Inflation Adjusted Year End

Opening Balance Post-Tax Withdrawal Balance

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Financial Plan 01/25/2022

Goals & Objectives - A Summary

Child 1's Higher Education

Future value of funding Child1's HIGHER SECONDARY expenses is Rs.. Present value of the goal is Rs.. To
accumulate this amount you need to invest Rs./month from now till goal year.

Future value of funding Child 1's GRADUATION studies' expenses is Rs.. Present value of the goal is
Rs.500,000. To achieve this goal you need to invest Rs./month from now till goal year.

To fund expenses for Child 1's POST GRADUATION studies you need to target to accumulate Rs.. Present
value of the goal is Rs.1,000,000. To accumulate this amount you need to invest Rs./month from now till goal
year. ASSUMPTIONS:- Rate of Inflation: 8% and Post Tax Return from new investments: 13%.

Child 1's Marriage

If I assume that Child 1 is expected to get married at age 26 and current cost for the same is Rs.1,000,000,
then inflated cost would be Rs.. To accumulate this amount you need to invest Rs./month from now till goal
year. I have assumed here average annual return of 13% post tax from your investment.

Child 1's Higher Education

Future value of funding Child2's HIGHER SECONDARY expenses is Rs.. Present value of the goal is
Rs.500,000. To accumulate this amount you need to invest Rs./month from now till goal year.

Future value of funding Child 2's GRADUATION studies' expenses is Rs.. Present value of the goal is
Rs.1,000,000. To achieve this goal you need to invest Rs./month from now till goal year.

To fund expenses for Child 2's POST GRADUATION studies you need to target to accumulate Rs.. Present
value of the goal is Rs.1,000,000. To accumulate this amount you need to invest Rs./month from now till goal
year. ASSUMPTIONS:- Rate of Inflation: 8% and Post Tax Return from new investments: 13%.

Child 2's Marriage

If I assume that Child 2 is expected to get married at age 26 and current cost for the same is Rs.1,000,000,
then inflated cost would be Rs.. To accumulate this amount you need to invest Rs./month from now till goal
year. I have assumed here average annual return of 13% post tax from your investment.

Retirement

To continue with the current lifestyle till your age of 80, you need to have Rs.53,700,000 by the time when
you retire i.e. at the age of 60. To accumulate this amount you need to save Rs.13,000/month in an
investment product that generates post-tax 15% return for you. Or if you increase your contribution by 10%
every year in monthly investment, then you can start with an investment of Rs.5,000/month from now.

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Financial Plan 01/25/2022

Summary of Investments & Insurance

Sl. No. Goal Lump Sum SIP

Child 1's Higher Education & Marriage

Higher Secondary (PV: 0.00L; FV: 0.00L) 0 0

Graduation (PV: 5.00L; FV: 0.00L) 0 0

Recommendation

Post Graduation (PV: 10.00L; FV: 0.00L) 0 0

Recommendation

Marriage (PV: 10.00L; FV: 0.00L) 0 0

Recommendation

Child 2's Higher Education &Marriage

Higher Secondary (PV: 5.00L; FV: 0.00L) 0 0

Graduation (PV: 10.00L; FV: 0.00L) 0 0

Recommendation

Post Graduation (PV: 10.00L; FV: 0.00L) 0 0

Recommendation

Marriage (PV: 10.00L; FV: 0.00L) 0 0

Recommendation

1 Retirement (Target Corpus: 5.37 Cr) 10,73,029 12,678

Recommendation

TOTAL REQUIRED 10,73,029 12,678

TOTAL RECOMMENDED 0 0

SURPLUS AVAILABLE

A Contingency Fund SIP 1,00,000

B Health Insurance Cover 3,00,000

Health Insurance Premium Family Floater 12,000

C Life Insurance Cover 1,13,97,539

Life Insurance Cover (Recommended) Term 60,00,000

Life Insurance Premium Term 1,200

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Financial Plan 01/25/2022

Last but not the least…

Implementation

This financial plan, which is a basic one and not comprehensive, is of no use if it is not implemented or
followed up with utmost sincerity and discipline. This plan report is prepared with certain assumed data and
rates - it can only be called 'your' report once you check all these assumptions - understand - and approve.
Ask questions, give your inputs and suggestions - then only it can be called 'your' plan. Implement this plan,
maximum within a month's time, otherwise the recommendations mentioned in this plan report will not hold
appropriate anymore.

Review

As mentioned, this plan report is created with help of certain assumptions. Some of these assumptions can
change in accordance with macro-economic changes, others can change with changes in your family's
preferences, concerns, cashflow and networth. So REVIEW is a must. Investment Review should be done at
least once in every 6 months and Plan Review once in every year - lifelong.

Legacy Planning

Write a WILL. This simple act can save lot of time and harassment in future for your near and dear ones. A
WILL written now can be changed 'n' number of times in future. So there is only one right time to prepare a
WILL and that is 'now'. Make a list of all your assets - movable as well as immovable. Also make sure that in
every asset you mentioned nominees and wherever possible you kept a second holder.

Documentation

Make sure that all your financial documents - policy papers, certificates etc. - are kept properly in a safe
place. Ideally you should maintain separate folders for storing similar type of documents. Keep your spouse
and grown-up children informed and aware about everything which they may feel need of in your absence. It
is a good practice to scan certain important documents and store digitally also.

Guide to Investment - I

While making any investment it is really important to understand the product first. Read objective of the
scheme carefully (it is just few lines of text!). Have a look at the past returns, preferably over a long term (5
years or more). All investments should be linked to a goal. Wealth accumulation itself can be a goal.
Whatever the goal is fix your horizon of investments; put your expectations in order. It really helps if your
overall portfolio of investments and insurance is kept small but appropriate.

Guide to Investment - II

There are various ratios that you will find in mutual fund factsheet. It is recommended that you ask right
question and take effort to understand those ratios. CAGR, IRR or XIRR talks about average annualised
compound return. 'Beta' talks about return expectation with respect to a scheme's benchmark index. 'Alpha'
talks about scheme's performance as per expectation. 'Standard Deviation' talks about volatility in return and
'Sharpe Ratio' reflects scheme's return potential vis-a-vis risk taken.

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