For some Retirement is the ugliest word in the language. ~Ernest Hemingway

Human Life Cycle

Education Earning Years

Phase I Phase II Phase III

Age- 22 yrs Age- 60 yrs

Marriage

Child birth

Child’s Education

Child’s Marriage

Housing

22 yrs 38 yrs 10- 20 yrs

Post Retirement Years

Life begins at retirement. ~Author Unknown

India is Growing Old !

As per Old Age Social and Income Security (OASIS) report

Tremendous increase in population aged 60 & above 8.9% or 11.30 Crores of total population in

2016 13.3% or 17.9 Crores in 2026

45 years old today will be 60 in 2020: is expected to live till age 80-85

60 is no more old now

I'm retired — goodbye tension, hello pension!

MoneyThe most important reason for working post- retirement

Indians need the MOST

Unless you own oil wells!

• Worldwide research shows Money as a leading reason for individual wanting to work in later years

• Indians and Russians are in top 2

• Egypt and Saudi Arabia are in last 2

Worldwide Survey Overview

Retirement can be a great joy if you can figure out how to spend time without spending money. ~Author Unknown

Government Can’t Afford Pension For All

• 1947 Total Population = 2047 Old Population

• By 2025, 17.5 Crores individuals will be • aged above 60 years

• Rs.. 100 per month of pension per person • or Rs.1200 per annum• = 17, 50,00,000*1200• = Rs.. 21,000 Crores

Earlier Scenario

40 Working years (age 20 to age 60)

10 Retirement years (age 60 to age 70)

Age 20 Age 60 Age70

During working years savings were highLife style was simpleAdditional expenses like mobile cable etc.. were not thereFuel expenses were less

Joint familyPensionSavings

A retired husband is often a wife's full-time job. ~Ella Harris

Today’s Scenario ……….30-30 principle

30 Working years (age 25 to age 55)

30 Retirement years(age 55 to age 85)

Age 25 Age 55 Age 85

During working years expenses are highLife style maintenance cost Additional expenses like mobile cable etc..Fuel expenses are highSavings are less

Nuclear FamilyNo PensionHigh medical costHigh cost of living

When a man retires, his wife gets twice the husband but only half the income. ~Chi Chi Rodriguez

Retirement: World's longest coffee break. ~Author Unknown

An ordinary father can support 4 extra ordinary children……………

But 4 extra ordinary children can’t support 1 ordinary father….

The best time to start thinking about your retirement is before the boss does. ~Author Unknown

The trouble with retirement is that you never get a day off. ~Abe Lemons

Accumlation phase

Annuity phase

1/3rd of the corpus can be commuted tax free and remaining amount used to purchase annuity from any annuity provider

Tools for accumulation phase

•PPF•EPF•Gratuity•NPS•Pension plans of Life Insurance companies•MF Schemes

Annuity received is Taxable in the hands of the investor

How a normal retirement plan works

Retire from work, but not from life. ~M.K. Soni

Accumlation phase

Annuity phase

1/3rd of the corpus can be commuted tax free and remaining amount used to purchase annuity from any annuity provider

Annuity received is Taxable in the hands of the investor

Available annuity options

• Annuity for Life• Joint Life last survivor annuity• Annuity guarantee for certain periods• Life annuity with return of purchase price• Increasing annuity

Provident Fund (PF) Pure debt portfolio leading to lower fixed returns. PF offers 8.75% per annum, at present. May vary depending on market conditions. Lacks liquidity / flexibility. Investors would not be able to withdraw even in exigency

New Pension Scheme Choice of asset class, with maximum 50% equity during the accumulation phase Upon reaching 60 years, maximum 60% can be withdrawn, with the remaining 40% to be taken as compulsory annuity from life insurance companies.

Life Insurance Products – Offer annuity plans (also referred as pension plans) Guaranteed but lower returns Investments predominantly in debt Return is typically around 7% to 8%, depending on whether investor wants money-back Pension amount taxable Lack of liquidity or flexibility. Once annuity starts, cannot withdraw amount under any circumstances.

What are the current options available for Retirement?

Inflation assumed at 5%

Accumulation period

Pension required on retirement would be Rs 1,29,658 pm

increasing at 5 % pa

Age 30 Age 60 Age 85

Corpus required at age 60 to maintain post retirement

expenses of Rs 1,29,658 would

be Rs 2,28,05,232

Inflation has been assumed at 5% and post retirement returns at 10 %

Rs 1 Lakh invested in 1980…….A period of 34 years

Reliance Growth fund performance history

80 Times in just 19 years

Source : www.moneycontrol.com

LUMP SUM Returns

SIP Returns

Reliance Growth fund performance contd….

When you retire, you switch bosses — from the one who hired you to the one who married you. ~Gene Perret

There are some who start their retirement long before they stop working. ~Robert Half

In retirement, every day is Boss Day and every day is Employee Appreciation Day. ~Terri Guillemets

Accumulation period

SWP starts form age 60

Age 30 Age 60Age 35

Lock in of 5 years SWP starts from age 60Withdrwal allowed with 1%

exit load after 5 yrs

1st in the industry with an option to accumulate retirement corpus through 10 % EQUITY

Two options to investWealth creation scheme--- Equity orientedIncome Generation--- Debt oriented

Additional Earnings by reinvesting the tax saved at 15 %

Accumlation phase

Distribution phase

Tax free accumulation and distribution100 % equity participation option during accumulation phaseFree Switch any number of timesPartial withdrawal allowed after 5 yearsOption to withdraw 100 % corpus tax freeStep up facility

SWP received is Tax-free ( equity option ) in the hands of the investor

RRF advantageOption to withdraw tax free corpusOption of 100 % equity participation

RRF advantage contd..

One BIGG Leap and then BABY STEPS

Retirement Needs calculator

Assumption : Inflation @ 5%,post retirement returns @10%. Life expectancy till 85