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PV: Monthly expenses 25,000
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Years to retirement15
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Inflation rate5%
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FV: Monthly expenses₱51,973.20
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Annual expenses₱623,678.45
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Years of retirement30
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Investment rate of return12%
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To determine the amount of retirement fund you need to put up now so that you can withdraw your annual retirement expenses and deplete the fund completely over your planned years of retirement period, with the assumed investment return rate, you would use the formula for the present value of an annuity. This formula calculates the lump sum needed today to fund a series of future withdrawals (the annuity), considering a constant return on the investment.
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Retirement fund needed at years to retirement₱5,023,844.68
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(1+r)^-n0.03337792388
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1-A120.9666220761
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A13/r8.055183968
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A14*Annual expenses₱5,023,844.68
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PV at year 0₱2,416,555.19
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Annual savings for x number of years to retirement₱354,808.88
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