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THE RETIREMENT
CALCULATOR
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1. RETIREMENT CORPUS CALCULATIONAggressiveModerate Conservative
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Age (at present)Inputyrs303030
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Retirement planned at age…Inputyrs606060
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Life expectancyInputyrs808080
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Monthly Household ExpenditureInputRs50,00050,00050,000
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Time to retirementyrs303030
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Expected inflation per yearInput%8.008.008.00
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Monthly Expenditure - at retirement ageRs503,133503,133503,133
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Annual Expenditure at ret. AgeRs6,037,5946,037,5946,037,594
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Provision for travel, healthcare annual expenditure
InputRs300,000300,000300,000
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Travel, healthcare will inflate byInput%101010
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Travel, healthcare at time of retirementRs5,234,8215,234,8215,234,821
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Annual expenditure at retirementRs 11,272,41511,272,41511,272,415
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Post retirement inflationInput%7.007.007.00
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Post retirement life expectancyyrs202020
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Expected return post retirementInput%8.008.008.00
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Corpus required at time of retirementRs204,763,150204,763,150204,763,150
In this calculation expenses are taken at END Mode.
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Assets Availabe for the planInputRs 1,200,000 1,200,000 1,200,000
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Growth expected in the assetsInput%15%12%8%
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Corpus at time of retirementInputRs 79,454,126 35,951,907 12,075,188
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Additional Corpus Required Rs 125,309,024 168,811,243 192,687,962
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Investment required for the goalExpected Return On Portfolio
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Particulars8%12%15%
This rate represent effective rate of return (after compounding effect)
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Nominal Rate of Return7.72%11.39%14.06%
Rate is converted in nominal rate of return
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Monthly Investment Required For the Goal 88,963 55,311 34,615
This should be the actual answer to display.
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Annual Investment Required For the Goal 1,164,123 787,496 533,938
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One Time Investment Required For the Goal 13,458,321 6,643,832 3,724,718
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Rationale :
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Input:
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1) It asks you to input your current age.
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2) It asks you to input your expected retirement age.
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3) It asks you to input your expected life expectancy.
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4) It asks you to input your current monthly household expenses required post retirement.
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5) It asks you to input expected inflation rate on household expenses.
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6) It asks you to input annual provision for travel and healthcare expenditure required post retirement.
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7) It asks you to input expected inflation rate on travel and healthcare expenses.
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8) It asks you to input expected inflation rate for expenses post retirement.
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9) It asks you to input expected return on investment post retirement.
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10) It asks you to input amount of Investments already made for retirement.
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11) It asks you to input expected return on investment in existing and future investments.
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Output:
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Formula:
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The following formula is used for the calculation:
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Retirement Corpus =C[1 - (1 + Real Rate of Return)-n]
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Real Rate of Return
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Where:
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S = Future value of Expenditure (Household and Travel & Healthcare)
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P = Present value of Expenditure (Household and Travel & Healthcare)
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j = Annual nominal inflation rate
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t = Number of years to retirement
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c = Sh (Future value of Household Expenses) + Sth (Future value of Travel & Healthcare Expenses)
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i = Real Rate of Return
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n = Number of years post retirement
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SI = Retirement Corpus – SInv (Future value of Current Investments)
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i = Investment Return / Frequency of investment (Frequency of investment: Monthly = 12, Yearly =1)
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nI = t * Frequency of investment (Frequency of investment: Monthly = 12, Yearly =1)
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R = Investment required per period
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