Professional Documents
Culture Documents
Need analysis
In this method, you can assess your needs -- and the needs of your loved ones -- and make a calculated assessment. The most critical factors are the number of dependents you have and their needs. Other major factors to consider are:
Loans Kind of lifestyle you want to provide to your family Provision for non-working spouse who would no longer get an income Child's education Child's marriage Providing for financially dependent parents Special needs Dreams and aspirations such as contributing to charitable causes
Contd
Once you determine the above factors, you run the following calculations: 1. Lump sum needs on Life to be Insured's death a. Home loan payoff b. Car loan payoff c. Child's education d. Child's marriage e. Emergency fund post death 2. Monthly income needs a. Monthly expenses b. Income of Living spouse in case she earns, or rent or interest c. Shortfall = (a-b) d. Shortfall is a-b. Suppose, expenses are Rs 50,000 and spouse's income is Rs 30,000 post tax, then shortfall is Rs 20,000 (50,000-30,000).
Retirement Planning
Conservative Mix
Conservative
Bonds
Average Annual Rate of Return 8.45%* 20% money market instruments, 50% bonds, 30% stocks
Moderate Mix
Moderate
Average Annual Rate of Return 9.66%* 10% money market instruments, 30% bonds, 60% stocks
Stocks
60%
30% 10%
Money Market Instruments Bonds
Past performance cannot guarantee future results. *All figures represent performance for the 30-year period ended December 31, 2012. Stocks are represented by the annual total returns of the S&P 500, bonds are represented by the Barclays U.S. Aggregate Bond Index, and money market instruments are represented by the Barclays 3-Month Treasury Bill Index. This illustration is not intended to represent the past or future performance of any specific investment. Asset allocation does not ensure a profit or protect against a loss.