Income Replacement Ratio

Pradeep has a current annual income of Rs.10,00,000. He is 30 years of age and expects to retire at the age of 55. He also
replacement of 75%. What is the income required by
Current Annual Income 1000000
Current Age 30
Expected Retirement 55
Years to Retirement 25
Expected Growth Rate in Income 10%
Income at the Time of Retirement $10,834,706 FV Function
Income Replacement Ratio 75%
Annual Income required in Retirement $8,126,029.46

Expenses Protection Ratio

Pradeep has a monthly expense of Rs.50,000 of which 60% is for household expenses. He is 30 years old a
of Rs. 10,000 pm at current prices for discretionary expenses in retirement. If inflation is seen at 6

Current Monthly Expenses 50000

Current Household Expenses 60%
Current Household Expenses 30000
Additional Monthly Exp. At Retirement 10000
Total Retirement expeses at current Price 40000
Current Age 30
Expected Retirement 55
Years to Retirement 25
Expected Rate of Inflation 6%
Income at the Time of Retirement $171,675 FV Function
me Replacement Ratio

at the age of 55. He also expects his income to grow at a rate of 10% and estimates that he will require an income
he income required by Pradeep in retirement?

nses Protection Ratio

es. He is 30 years old and expects to retire at the age of 55. He expects to incur additional expenses
t. If inflation is seen at 6%, what is the expense that has to be met by retirement income?
 Vinayak do monthly Exp of
Rs.35000 by today’s value for his
retirement 25 years away at the
age of 60. He expects to live up to
80 years. What is the retirement
corpus required if the banks
deposit into which he will invest
his retirement savings is likely to
yield 8% and the rate of inflation35000
Step1:Calcultion of Exp. at Retirement
Income Required at Current Value
is
6%?.Currently
Current Age Vinayak can invest 35
Retirement Age 60
the monthly
Years to Retire(Years) saving at
25 12%.
Expected Inflation(Growth in Income) 6%
150215
Step2:Calcultion of Retirement Corpus
Income Reqired at Retirement 150215.48
Retirement Age 60
Expected Life after Retirement 80
Retirement Period 20
Rate of Return on Corpus 8.0%
Inflation Rate 6%

Inflation Adjusted Rate of Return 1.89%

Per 1
Months in a Year 12
Retirement Corpus 30057908
Step 3: How Much Harman Should Save to Get
Retirement Corpus(Future Value) 30057907.63
Years to Retire
Expected Rate of Return where the Savings will be 25
Invested 12.00%
Per 1
Months in a Year 12
Amount Required at Achieve Retirement Corpus 15839.67
$201,279.82
Reverse Model
Saving and Investment 15839.67
Rate of Investment 12%
Time of Investment 25
Mode 1
Months in a Year 12
Value in future 30057913.64
Rate of Return of Corpus Investment 8%
Inflation 6%
Time of Investment P0st Retirment 20
Mode 1
Months in a Year 12
Inflation Adjusted Rate 1.89%
Amount Per Month that he Will get 150215.51
Inflation Rate 6%
Current Age 35
Retirement Age 60
Years of Retirement 25
Value as on Today 35000.01
 FV Function

Every Month from 60 th Year

Per Annum
Per Annum

((1+Rate of Return)/(1+Inflation RATE))-1

PV Function at the age of 60

Pmt Function 15839

12
everse Model 190068
Amount Invested Each Month
Corpus created at the age of 60 which will be invested for 20 Years

(1+rate of return)/(1+inflation rate)-1

EVERY MONTH FOR 20 YEARS
Required Monthly at the age of 60 for 20 Years

pv $60,000.18

6%
35

pmt $461,166.63
1
12
20
1.89%
FV Functio $92,106,162.99
35
12%
1
12
14180.5
Input
 Creating a Corpus for Buying a Car
Car Planning 2500000
Current Age 21
Car required at age 25
Years to achieve 4
Inflation 3%
Car Value after 5 Years 2813772
Investment RATE 15%
Years To Invest 4
Per 1
No of Months in a Year 12
Monthly Investment Req 42604.67

Abhi have to Monthly save and Invest Rs.42604 to create a corpus of 2813772 at 15% for 4 years.This will convert his dream

Creating a corpus of 10 Cr (as of today)at the age of 60

Corpus Required 100000000.00
Current Age 23
Corpus Required at the age 60
Years to achieve Goal 37
Inflation 4%
Corpus Value at the desired age 426808985.61
Investment Rate 12%
Years to invest(NPER) 37
Months in a year 12
Mode 1
NPER 444
Amount REQUIRED 51581.17

Akshay have to Monthly save and Invest Rs.51581 at 12% per annum for 37 years to create corpus of Rs.426808985 at the
age of 60.This will help him to maintain the same life style as he could maintain currently with Rs 10 Cr.
eating a Corpus for Buying a Car
Present Value(Current Cost) of car

Years
Per Annum
Future Value of Car after 4 Years,FV Function
Various Investment Avenues(Equity Mutual Fund) CAGR

Mode

PMT Function

4 to create a corpus of 2813772 at 15% for 4 years.This will convert his dreams to reality.

rpus of 10 Cr (as of today)at the age of 60

Current Value

This corpus is to be created

Equity Mutual Fund

Save and Invest

581 at 12% per annum for 37 years to create corpus of Rs.426808985 at the
ain the same life style as he could maintain currently with Rs 10 Cr.