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  • Sapm - Group 15

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    indyman
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    Group 15 presented a retirement savings plan for an individual with a current salary of Rs. 7,20,000 and annual salary hikes of 7.5%. The plan assumes 5% annual inflation and equity and debt returns of 10% and 6% respectively. It calculates annual expenses post-retirement from age 60-80 and their net present value. The plan then outlines savings and investments from age 30-60 to accumulate enough funds to cover post-retirement expenses estimated at Rs. 4,19,31,485 from age 60-80. A breakdown of annual savings, investments, returns and accumulated savings is provided from age 30 to 60 to show the retirement corpus growing to the required amount.

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    Sapm -Group 15

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    Group 15 presented a retirement savings plan for an individual with a current salary of Rs. 7,20,000 and annual salary hikes of 7.5%. The plan assumes 5% annual inflation and equity and debt returns of 10% and 6% respectively. It calculates annual expenses post-retirement from age 60-80 and their net present value. The plan then outlines savings and investments from age 30-60 to accumulate enough funds to cover post-retirement expenses estimated at Rs. 4,19,31,485 from age 60-80. A breakdown of annual savings, investments, returns and accumulated savings is provided from age 30 to 60 to show the retirement corpus growing to the required amount.

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    9 views3 pages

    Sapm - Group 15

    Uploaded by

    indyman
    Group 15 presented a retirement savings plan for an individual with a current salary of Rs. 7,20,000 and annual salary hikes of 7.5%. The plan assumes 5% annual inflation and equity and debt returns of 10% and 6% respectively. It calculates annual expenses post-retirement from age 60-80 and their net present value. The plan then outlines savings and investments from age 30-60 to accumulate enough funds to cover post-retirement expenses estimated at Rs. 4,19,31,485 from age 60-80. A breakdown of annual savings, investments, returns and accumulated savings is provided from age 30 to 60 to show the retirement corpus growing to the required amount.

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    of 3

    Planning Ahead!

    Group 15:
    JayaPradeep Meduri
    Swapnil Deore
    Vinay V Nayak
    Basic Assumptions Post Retirement Expense Item Per Year
    Clothing 20,000
    Holidays 60,000
    Auto expense 60,000
    Current Salary Hike Groceries 1,80,000
    Salary: Per Year: Entertainment 24,000
    7,20,000 Rs 7.5% Utilities 96,000
    Annual Expense (PV) 4,40,000
    Annual Expense (FV=60 Years) 19,01,655
    Inflation
    Equity NPV of 20 Years of Expense (60-80) 419,31,485
    Assumption:
    Return: 10%
    5%

    Expense Assumptions
    Debt Return: • Medical, Conveyance, Holiday Trips, Furniture
    6% are all reimbursed expenses
    • Planning to buy 2 cars (at age 30 and 40) and a
    house (worth 50 lacs at age 30)
    • Education expenses of one child (Schooling, BE,
    MBA)
    Retirement Age
    Retirement Savings Plan
    30 35 45 51 60

    Savings Plan Current income


    Expenses
    Housing EMI
    7,74,000 11,11,177 22,90,171

    2,76,438 3,52,812 5,74,694


    35,34,425

    7,70,145
    67,76,335

    11,94,748
    Entertainment 42,000 53,604 87,315 1,17,010 1,81,522
    Holidays 21,000 26,802 43,657 58,505 90,761
    Groceries 1,26,000 1,60,811 2,61,945 3,51,031 5,44,565
    Utilities 63,000 80,406 1,30,972 1,75,516 2,72,282
    Support to family 1,05,000 1,34,010 2,18,287 2,92,526 4,53,804
    Total Expenses Car on EMI 1,00,000 4,20,000
    during 60-80yrs Insurance
    Education
    15,000
    0
    15,000
    38,288
    15,000
    62,368
    15,000
    40,43,120
    15,000
    0
    = Total Expenses 7,48,438 8,61,733 18,14,239 58,22,854 27,52,681
    Particular Year Savings 25,562 2,49,444 4,75,932 -22,88,430 40,23,654
    Rs 4,19,31485 Total Investment Corpus 27,433 8,69,688 65,76,197 129,98,493 516,44,536

    Total Saving at Equity %


    Debt %
    60%
    40%
    65%
    35%
    75%
    25%
    57%
    43%
    30%
    70%
    the age of 60 = Average Equity Return % 10% 10% 10% 10% 10%

    Rs6,03,48,000 Average Debt Return %


    Total Equity Return
    6%
    1,646
    6%
    56,530
    6%
    4,93,215
    6%
    7,40,914
    6%
    15,49,336
    Total Debt Return 658 18,263 98,643 3,35,361 21,69,071
    Total Savings 29,738 9,44,481 71,68,054 140,74,768 553,62,943

    NPS Return 8% 0 0 0 0
    NPS Savings 2,76,048 3,35,707 16,42,707 26,48,860 49,85,523
    Accumulated Savings 3,05,786 12,80,188 88,10,762 167,23,628 603,48,465

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