Retirement Planning Save for Tomorrow

Understanding the Power of Saving

Suppose your age is 40 years and expenses per month are Rs .10,000.  Assuming Inflation rate to be 6%. How much will this 10,000 be after 20 years when you are 60 years old?

Can You Imagine?

At 60, it will be 32,071------Three fold…. of what you are spending 20 years before.

So What Is Inflation!

Inflation is measured in percentage terms and refers to a sustained rise in price of goods and services.

For eg. In 1960’s you could buy a movie ticket for 20 paise and now it is costing you Rs.200.

Gold prices:

In 1960 - Rs.111

In 1970 – Rs. 184

In 1980- Rs. 1,330

In 1990 – Rs. 3,200

In 2000- Rs. 4,400 

And In 2010 – More than Rs. 20,000

That’s the effect of inflation.

So how Much Funds Will be Required in order to take care of your monthly expenses at 60?

You need to start planning from today. You may require around Rs.48,10,650 -.

In order to make Rs.48,10,650,  how much investment needs to be made every year so that you will get an income of 32,071 per month at the age of 60?

Assuming interest at 9%, you ought to make around Rs.93,807 per annum investment.

Assuming that a person makes investment of Rs.100,000 every year at the age of 40 years, he gets an amount of Rs.55,76,500 at 60 years.

100000 -------(Every Year)------------------------55,76,500

(40 Years)--------------------------(60 Years)

Assuming the person does not make an investment at 40 years but makes an investment at 45 years every year (i.e. 5 years later) he gets around Rs.32,00,000 only at 60 years.

Nil------------------100000-----(every year 100,000)-----------32,00,000

(40 Years)------(45 Years)--------------(60 Years)

A person who makes an investment of 1,90,158 (every year) at 45 gets Rs.55,76,500 at 60 years.

----------------------1,90,158-(every year)--------55,76,50
(40  years)-------- -----(45 Years)-----------------(60 Years)

But a person who invests at 41 years (i.e. Rs. 121,010 every year from 41 years) has to invest only Rs.1,21,010 to get Rs.55,76,500 at 60 years.

--NIL ------1,21,010 (every year)-----------55,76,500

(40 Yrs)---(41 Years)-------------------------(60 Years)

This shows that earlier the investment, the better the returns are at maturity.

Save, Save, Save Money should be your motive.

Plan your retirement at an young age and have a peaceful life.

For contact details: venkatesh_iv27@yahoo.com