:: Retirement Planning ::

• Investor: ‘Do you know

how old I will be when I
become wealthy using
your plan?’

•Advisor: ‘The same age

as you will be if you do
not use this plan.’
About Mr. Mehta
• Mr. Mehta is a businessman
aged 40 years. He is from
middle class family. Who do
not have monthly fixed income.
• He is married and his wife is a
housewife. He has two children
and both are studying.
• He is paying two loan
installment right now: Housing
loan & Car Loan.
• His worry: Need to save for
children’s marriage and his
retirement.
• He is planning to retire at the
age of 60 years.
Retirement Planning
• He is a risk averse investor.
• His current investments includes
Bank Fixed deposits, PPF/ NSC,
Insurance policies, SIP in mutual
funds.
• His current investment fulfills his
short term needs.
• Now, he is worried about his post
retirement finances. Wants to live
with current standard of living after
retirement.
• He approached Mr. Joshi, a
financial advisor for advise.
Retirement Planning
• Mr. Joshi after studying Mr. Mehta’s
current average cash flow and his liability
over next 15 years, he feels still there is
some gap for long term planning.

• He advice him to invest only Rs. 29,950/-

for 15 years. (Which is not even Rs.
2,500/- per month.)
• Further he said two things:
– He will receive Rs. 9,500/- monthly for life
time after 15 years.
– He will be having strong capital base of
Rs.16,38,000/- after 15 years.

• Mr. Mehta ask him do you think I am a

fool? Just by investing only Rs. 4,49,250/-
in 15 years I will get this much? (Rs.
16,38,000 + Rs. 9,500 monthly for life
time)
• Mr. Joshi said it is very much possible, let
me share with you more on this with the
help of presentation:
Retirement Planning
• Just two easy step to follow:
 Make an investment of Rs.
29,950/- every year in equity
oriented mutual fund for 15
years.
 After 15 years invest Rs.
16,38,000/- in to liquid fund or in
Bank fixed deposit.
 Let me show you in detail…

– Assumptions:
 Equity Mutual fund give you return of 15%
per annum for 15 years.
 You must get at least 7.00% per annum
return on Rs. 16,38,000.
 Invest Rs. 29,950/- every months for 15 years in Mutual Fund

Installment 29,950 Interest 15.00% Final Amount 1,638,788

Installment Total at the end

No of Years Amount Amount B/f Total Amount Interest of the month
A B C D=(B+C) E=(D*Interest) F=(D+E)
1 29,950 0 29,950 4,492.50 34,443
2 29,950 34,443 64,393 9,658.88 74,051
3 29,950 74,051 104,001 15,600.21 119,602
4 29,950 119,602 149,552 22,432.74 171,984
5 29,950 171,984 201,934 30,290.15 232,224
6 29,950 232,224 262,174 39,326.17 301,501
7 29,950 301,501 331,451 49,717.60 381,168
8 29,950 381,168 411,118 61,667.73 472,786
9 29,950 472,786 502,736 75,410.39 578,146
10 29,950 578,146 608,096 91,214.45 699,311
11 29,950 699,311 729,261 109,389.12 838,650
12 29,950 838,650 868,600 130,289.99 998,890
13 29,950 998,890 1,028,840 154,325.99 1,183,166
14 29,950 1,183,166 1,213,116 181,967.39 1,395,083
15 29,950 1,395,083 1,425,033 213,755.00 1,638,788
 Invest Rs. 16,39,000/- in Mutual Fund or Bank FD

Installment -9500 Interest 7.00% Final Amount 1,639,088

1,638,788
Withdrawal Total at the end of the
No of Months Amount Amount B/f Total Amount Interest month
A B C D=(B+C) E=(D*Interest/12) F=(D+E)
1 -9,500 1,638,788 1,629,288 9,504.18 1,638,792
2 -9,500 1,638,792 1,629,292 9,504.21 1,638,797
3 -9,500 1,638,797 1,629,297 9,504.23 1,638,801
4 -9,500 1,638,801 1,629,301 9,504.26 1,638,805
5 -9,500 1,638,805 1,629,305 9,504.28 1,638,809
6 -9,500 1,638,809 1,629,309 9,504.31 1,638,814
7 -9,500 1,638,814 1,629,314 9,504.33 1,638,818
8 -9,500 1,638,818 1,629,318 9,504.36 1,638,822
9 -9,500 1,638,822 1,629,322 9,504.38 1,638,827
10 -9,500 1,638,827 1,629,327 9,504.41 1,638,831
11 -9,500 1,638,831 1,629,331 9,504.43 1,638,836
12 -9,500 1,638,836 1,629,336 9,504.46 1,638,840
13 -9,500 1,638,840 1,629,340 9,504.48 1,638,845
14 -9,500 1,638,845 1,629,345 9,504.51 1,638,849
15 -9,500 1,638,849 1,629,349 9,504.54 1,638,854
16 -9,500 1,638,854 1,629,354 9,504.56 1,638,858
17 -9,500 1,638,858 1,629,358 9,504.59 1,638,863
18 -9,500 1,638,863 1,629,363 9,504.62 1,638,867
19 -9,500 1,638,867 1,629,367 9,504.64 1,638,872
Retirement Planning

• Wow, it is wonder full.

• Mr. Joshi thank you very

much for your advice.
• Now I am relaxed.
• Just tell me in which mutual
fund equity scheme we
should invest.
 :: Remember ::

“We do not need to be wealthy to be an investor ….

But we can be wealthy if we are investors”

Moral of the story

• Start early.
• Invest regularly.
• Plan your investment and play
your plan. Do not delay.

Think of each yearly payment as lying a brick. One by one, you

can lay the foundation of a secured financial future.