Thursday, April 18, 2019

Are you investing enough to sustaining your life style in future?

AM I investing enough to sustaining my family's life style in future? . This is the question will most of the person's mind considering the cost of living we are going through now.

For this I have prepared the below sheet considering various age and monthly expenses . This will help you to understand what is the monthly income required in future considering inflation.
Also what is corpus amount required after my active employment/business income ends(may be at age 55/60) and till my last day(80 years).


How to read this sheet?

For example if my age is 35 years and monthly expense is Rs 30,000 ,considering 6% inflation I need Rs 96,214 monthly after 20 years(2039) , Rs 172,305 monthly after 30 years(2049) to manage monthly expenses.

What if after my retirement?
Say if you retiring after 20 years (2039) at age of 55 years , you need to create a retirement corpus of Rs 23,274,641(2.32 Crores) .This is to withdraw monthly Rs 96,214 (equal to Rs 30,000 monthly expenses today(2019) ) till age of life expectancy assumed 80 years (with 6% increase year on year considering inflation)

How much I need to invest to achieve ?
Option 1 : Invest Rs  23,294 Monthly via equity mutual funds assuming 12% annualized returns
Option 2 : Invest Rs  39,252 Monthly via FDs,PPF,EPF,Pension Plans, ULIPs , Insurance plans assuming 8% annualized returns(even though some of them gives less than 8% ,i assumed 8% as average for simple calculation purpose)

Inference
With this sheet, you can get
1. an idea about your future monthly expenses need including inflation
2. What is your retirement corpus required?
3. How much investment required with different investment products likw Equity Mutual Funds, FD,EPF,PPF,Sukanya Smrithi, ULIP,Pension plans etc
4.If you are already investing check if there is any gap in the investment required amount

Hope this helps . Happy Investing & Secure your future life style :-)