Plan for Retirement : Today

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Session Overview

Retirement Planning Concept

• Retirement – a dream & a nightmare

• Factors affecting Retirement Planning

• How to check if you’re ready for retirement?

• Retirement – reality check

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Retirement – a dream

What comes to your mind when one mentions ‘Retirement’?

Laid-back life Abundant free time Unwind and fulfill desires

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Retirement – a nightmare

But do we think of the flip-side of the coin?

No stable income Rising Medical Expenses Higher costs of living

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Retirement - nightmare

This ultimately leads to following worries:

Erosion of Savings Growing dependency

due to Inflation on children

What has changed in recent years, that makes retirement more of a nightmare?

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What has changed?
‘Shrinking work years’ is a worry

Notable factors:

Older Learner (20 yrs) Earner (40 yrs) Retired Delayed start
Generations of career
0 20 60

Early Retirement

Delayed start Early Longer average

to career Retirement lifespan
Newer Longer lifespan
Learner (25 yrs) Earner (30 yrs) Retired (30 yrs)
Generations
0 20 25 55 60 85

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The 30 - 30 rule of Living Life

Older
Newer Generations
Generations

Age 20 to 60 Age 60 - 70 Age 25 to 55 Age 55 - 85

Work for 40 years Retire for 10 years Work for 30 years Retire for years 30

This compels us to think: “Are we really ready for retirement?”

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Are you ready for Retirement?

5 simple questions to check your retirement readiness

1. Have you decided on the age at which you want to retire?

2. Based on your current monthly expenses, have you determined your ideal retirement corpus?

3. Imagine you wish to retire at 50. Are you sure that your savings will suffice for the rest of your life?

4. Are you saving enough for your retirement?

5. Do you have provisions for emergencies?

If any of the answer is ‘No’, then it is high time you start planning for Retirement!

Source: https://economictimes.indiatimes.com/nri/forex-and-remittance/india-was-the-top-recipient-of-remittances-worldwide-in-2018/articleshow/70310386.cms

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How to plan for Retirement?

You can plan for retirement by answering the following questions

1. What will be your monthly expense after ______ years? ‘Future Monthly Expense’

2. How big should your corpus be, to earn an interest = future monthly expense? ‘Retirement Corpus’

3. How much should you contribute monthly to reach that corpus? ‘Monthly Contribution’

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How to plan for Retirement?

Retirement Planning Process

• How to plan for Retirement?

1. Calculate Future Monthly Expense

2. Calculate Retirement Corpus Needed

3. Calculate Monthly contribution

Kindly download the EZ Calculator from Playstore /App Store

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How to plan for Retirement?
Let’s understand with an example

Here’s a customer that you recently met:

• Name: Vasudev R
• Age: 40 years
• Occupation: Senior Manager in an MNC
• Annual Income: Rs.26 Lakhs
• Family Details: Housewife and 2 kids
• Age of children: 4&8
• Current Monthly Expenses: Rs.1 Lakh
• Expected age of retirement: 60 years (in the year 2039)

Assuming inflation at 6% and interest at 8%, let us calculate the

retirement corpus & money required per month to build that
retirement corpus.

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How to plan for Retirement?
1. Calculate Future Monthly Expense Future Monthly Expense Calculator

Input
Heads Details
Current Monthly Expense Rs. 1,00,000
Inflation 6%
Years to Retire 20

Output
Heads Details
Future Monthly Expense Rs. 3,20,713
Future Annual Expense Rs. 38,48,563
(Monthly expense x 12)

This tells us that if Vasudev’s current monthly expense in 1L, he would need 3.2L every month in future

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How to plan for Retirement?
2. Calculate Retirement Corpus Retirement Corpus Needed

Input
Heads Details
Future Annual Expense Rs. 38,48,563
Desired Rate of Interest 8%

Output
Heads Details
Retirement Corpus Needed Rs. 4.81 Crores

If he spends 38.5L annually in future, then he would need 4.81 Crores of Retirement Corpus to earn 38.5L in interest

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How to plan for Retirement?
3. Calculate Required Monthly Contribution
Required Contribution:
Annual Monthly
Input
Heads Details
Retirement Corpus needed Rs. 4.81 Crores
Desired Rate of Interest 8%
Years to Retirement 20

Output
Heads Details
Required Annual Contribution Rs. 9,73,375
Required Monthly Contribution Rs. 81,132
(Annual contribution/12)

To reach a retirement corpus of 4.81 Crores in 20 years, he would need to contribute Rs.81,132 every month &
Rs.9,73,375 every year in future

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How to plan for Retirement?
The investor’s Dilemma

• Mr Vasudev now knows that he needs to save Rs. 9,73,375 every Year

• Mr Vasudev now knows that he needs to save Rs. 81,132 every month

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Presenting a Retirement Solution Bajaj Allianz Life LongLife Goal
Product Features:
1

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How to plan for Retirement?
Let’s understand with an example

Here’s a customer that you recently met:

• Name: Gautam Shah

• Age: 40 years
• Occupation: Shop owner
• Annual Income: Rs.15 Lakhs
• Family Details: Wife and 1 Kid
• Current Monthly Expenses: Rs.15000
• Expected age of retirement: 60 years (in the year 2039)

Assuming inflation at 6% and interest at 8%, let us calculate the

retirement corpus & money required per month to build that
retirement corpus.

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How to plan for Retirement?
1. Calculate Future Monthly Expense Future Monthly Expense Calculator

Input
Heads Details
Current Monthly Expense Rs. 15,000
Inflation 6%
Years to Retire 20

Output
Heads Details
Future Monthly Expense Rs. 48,107
Future Annual Expense Rs. 5,77,284
(Monthly expense x 12)

This tells us that if Gautam’s current monthly expense in 15K, he would need 48K every month in future

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How to plan for Retirement?
2. Calculate Retirement Corpus Retirement Corpus Needed

Input
Heads Details
Future Annual Expense Rs. 5,77,284
Desired Rate of Interest 8%

Output
Heads Details
Retirement Corpus Needed Rs. 56.67 Lacs

If he spends 5.77 L annually in future, then he would need 56.67 Lacs of Retirement Corpus to earn 5.77L in interest

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How to plan for Retirement?
3. Calculate Required Monthly Contribution
Required Contribution:
Annual Monthly
Input
Heads Details
Retirement Corpus needed Rs. 56.67 Lacs
Desired Rate of Interest 8%
Years to Retirement 20

Output
Heads Details
Required Annual Contribution Rs. 1,23,855
Required Monthly Contribution Rs. 9,623
(Annual contribution/12)

To reach a retirement corpus of 56.67 Lacs in 20 years, he would need to contribute Rs.9,623 every month & Rs.1,23,855
every year in future

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When to plan for Retirement?

The Investor’s Dilemma

• Mr Gautam now knows that he needs to save Rs. 1,23,855 every Year

• Mr Gautam now knows that he needs to save Rs. 9,623 every month

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Presenting a Retirement Solution Bajaj Allianz Life Long Assure
Product Features:
1 Life cover till 100 years of age

2 Cash bonus from 6th Year

3
Guaranteed Cash back of 3% of Sum Assured
every year till 99th birthday

4 Guaranteed death benefit of upto 300%

5 Flexible premium payment term options

6 Option to take policy benefits in monthly

installments

7 More value for money with High sum assured

rebate (HSAR)
8 Option to enhance your coverage with Riders

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 Thank you

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