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RETIREMENT WORKSHEET

How much money do I need for retirement?

Ser. No. Example

Stage in Life

1 In how many years do you expect to retire? 25

2 Estimated years to be spent in Retirement 20

Retirement Expenses

3 What will your annual retirement expenses at todays cost? Rs. 120,000

4 Estimated Inflation Level 5%

5 Inflation Factor based on number of years left until your retirement and the estimated Inflation level

6 Multiply line 3 by line 5 Rs. 318,000

7 Multiply line 6 by line 2 to arrive at total retirement expenses Rs. 6,360,000

Retirement Income

8 How much money do you expect to receive when you retire from your EPF/ PPF/ DSOPF/ Pension Plan/ Gratuity etc. Rs. 2,100,000

9 What level of annual income (e.g. pension) do you expect after retirement? Rs. 40,000

10 Multiply line 9 by your estimated years of retirement (line 2) Rs. 800,000

11 Add lines 8 and 10 to get your total retirement income Rs. 2,900,000

Retirement Goal

12 Subtract line 11 from line 7 to arrive at your retirement goal Rs. 3,460,000

How much money do I need to put aside each year to reach my retirement goal?

13 What are your current investments made for retirement? Rs. 150,000

14 What return do you expect on these investments (not adjusted for inflation)? 16%

It would typically range from 2.5% for Savings Bank to 18% for equity (over 20 year periods)

15 Actual return after adjusting for estimated inflation at line 4 11%

16 Assumed Rate of Return Factor based on number of years until your retirement

17 Multiply lines 13 and 16 to arrive at projected values of current investment Rs. 2,038,500

18 Rs. 1,421,500

19 Discount Factor based on expected rates of return & inflation and years to retire

20 Rs. 12,793

20 Rs. 1,066

Today the average life expectancy for a 60-year old Indian male is 75. You may want to assume a Life expectancy of 85 tomake sure you are adequately covered 

It would typically be around 70% of your current expenses. Cater for dependents education/ marriage if to be done inretirement 

2.65 (20 yrs & 5% inflation)

13.59 (11% returns for 25 years)

Shortfall : Subtract line 17 from line 12 to c ompute your retirement goal shortfall

0.009 (11% returns for 25 years)

The additional ANNUAL savings you need to make to reach your retirement goal (Multiply lines 18 & 19)

The additional MONTHLY savings you need to make to reach your retirement goal (Multiply lines 18 & 19)

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 Yourself 

10

40

Rs. 300,000

6%

10.29

Rs. 3,087,000

Rs. 123,480,000

Rs. 20,000,000

Rs. 240,000

Rs. 9,600,000

Rs. 29,600,000

Rs. 93,880,000

Rs. 600,000

18%

12%

3.11

Rs. 1,866,000

Rs. 92,014,000

0.06

Rs. 5,244,798

Rs. 437,067