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Annuities Examples in

Retirement Planning

Example 1
Mr Sharma, 35 years old , is currently having income of
Rs 45000 per month and incurring monthly expenditure
of Rs 30000 per month. He would be retiring from his
job at the age of 60 years.
How much would be the monthly expenditure when he
retires?
Assume inflation rate of 6% per annum.
Fv=p(1+i)n
P=30000
i=6%
N=25

Example 2
Mihir, 32 years old , is currently having income of Rs
55000 per month and has estimated that his monthly
expenditure would be Rs 90000 per month when he
retires from his job at the age of 60 years. He wish to
accumulate the retirement fund at retirement so that he
could meet his monthly expenses after retirement for 25
years.
He would be getting return of 12% per annum form his
investments and inflation rate is assumed to be 7% per
annum.
Find how much retirement fund he would be requiring at
retirement to meet his monthly expenses after

Example 3
Sunil,25 years old, working in private firm, has been
advised by his financial advisor that he would be
requiring retirement fund of 75 lakhs after 35 years . He
would be getting return of 12% per annum form his
investments and inflation rate is assumed to be 7% per
annum.
How much he should start saving and investing per
month so that to reach the desired goal for retirement
planning?
Fva=750000 ,A=? ,n=35 ,,, i=12% ,, in this question
the I should divide by 12 and as well the year should
multiply by 12

Example 4
Sunil,25 years old, working in private firm, has been advised
by his financial advisor that he would be requiring retirement
fund of 75 lakhs after 35 years . He is currently having
income of Rs 45000 per month and incurring monthly
expenditure of Rs 30000 per month.
How much he should start saving and investing per month so
that to reach the desired goal for retirement planning?
He would be getting return of 12% per annum form his
investments and inflation rate is assumed to be 7% per
annum
What is the financial gap, if any for his retirement planning?

Example 5
Mr Satinder is of age 45 years and wishes to retire at
60. He starts investing from today to build his
retirement corpus through a monthly SIP in a Debt
Mutual Fund scheme which is expected to give a return
of 9% p.a. His current expenses are Rs. 40,000 per
month and he requires an inflation adjusted monthly
stream of income for 20 years post-retirement by
investing the accumulated corpus in an investment
yielding 8% p.a. Assume inflation of 5% during this
period.
Calculate (a) The retirement corpus to be accumulated
to sustain the required income stream post-retirement.

Example 6
Mr. Verma and Mrs. Verma who are respectively 32 and 30 years of age
today, start investing on a monthly basis in a debt mutual fund scheme
yielding 9% p.a. till Mr. Vermas retirement at age 60. Post-retirement,
they would invest the corpus in an investment yielding 8% p.a. They
would require Rs. 80,000 in the first month of retirement and then
inflation adjusted on a monthly basis till Mrs. Vermas expected life of 85
years. Mr. Vermas life expectancy is 80 years. Assuming inflation of 5%
p.a.:
a) For how many years post-retirement, they require the retirement
corpus to last?
b) What is the amount required on retirement age of Mr. Verma?
c) Find the monthly investments required in Debt MF scheme till
retirement.

Example 7
Mr Devan aged 40 years old is drawing annual salary of
Rs 6,50,000 in year 2013-14. During the year 2013-14,
he paid Rs 30,000 for LIC premium, Investment in fixed
deposit Rs 50,000 for 4 years, Investment in PPF for
40,000, Medical insurance premium Rs 15000,
Investment in close ended debt fund Rs 60,000 for 3
years. Calculate the total tax paid by Mr Devan after
paying education cess for the assessment year 201415?

Example 8

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and as well in phone
Mr Hiralal, aged 36 years old, has computed his total
annual income for the year 2013-14 as Rs 6,80,000.
During the year he purchased the house for Rs 15 lacs,
Invested in close ended debt fund Rs 50,000 for 3 years,
received gratuity amounting 70,000, paid medical
insurance premium Rs 45,000 (including Rs 20,000 for
his parents aged 68 years old), invested Rs 35,000 in 5
years fixed deposit in a bank, PPF investment Rs
55,000, Rs 25,000 as donation to political party.
Calculate the total tax paid by Mr Hiralal after paying
education cess for the assessment year 2014-15?