Upload
sushil-alewa
View
219
Download
0
Embed Size (px)
Citation preview
7/29/2019 Investment Planning for Retirement
1/35
Investment Planning for Retirement
An initiative of SEBI & NISM
7/29/2019 Investment Planning for Retirement
2/35
Agenda
Introduction
Retirement Plan
Financial Planning
SMART Goals Saving and Investment
Loan v/s Investment
Personal Budget
Calculator Personal Net worth
Calculator
Risk v/s return
Compounding
Inflation Effects on
Investment
Investment
Commandments
Investment Vehicles
Avoid investmentscams
Estate planning
7/29/2019 Investment Planning for Retirement
3/35
Need for financial education
Deterioration of personal finances
Proliferation of new and complex
financial products
7/29/2019 Investment Planning for Retirement
4/35
Retirement plan
Earn a satisfying income post-retirement
Enjoy a comfortable life post-
retirement
7/29/2019 Investment Planning for Retirement
5/35
7/29/2019 Investment Planning for Retirement
6/35
Calculating the corpus
Retirement age (years) 60
Current age (years) 58
Life expectancy (years) 83
Years after retirement 23
Current annual expenses Rs. 1.80 lacs (Rs. 15,000 per mth)
Average return on investment 12% p.a.
Inflation 5% p.a.
Inflation adjusted return 7% p.a.
Total retirement corpus required Rs. 21 lacs (approximately)
7/29/2019 Investment Planning for Retirement
7/35
Action points for retirement plan
1. It is never too late to start
2. Deposit everything you can into
your retirement plan
3. Reduce expenses
4. Aim for good post-tax returns
5. Refine your goals
6. Sell assets that are not producing
income or growth and invest in
income producing assets
7/29/2019 Investment Planning for Retirement
8/35
Financial planning
Financial planning is a process ofmeeting your life goals through
proper management of your finances
7/29/2019 Investment Planning for Retirement
9/35
Financial planning process
7/29/2019 Investment Planning for Retirement
10/35
IDENTIFY GOALS
Goals are dreams with
deadlines
- Zig Ziglar
7/29/2019 Investment Planning for Retirement
11/35
7/29/2019 Investment Planning for Retirement
12/35
Savings or investments?
7/29/2019 Investment Planning for Retirement
13/35
Loans or investments?
7/29/2019 Investment Planning for Retirement
14/35
Preparing the budget
7/29/2019 Investment Planning for Retirement
15/35
Importance of budgeting
Preparing a budget help: Keep track of all your incomes and
expenses
Control the expenses Make you aware of necessary and
unnecessary expenses
You get better control of your day-to-day
life
7/29/2019 Investment Planning for Retirement
16/35
Preparing a budget
Add up your income
Add up your expenses
Subtract expenses from income
Cut expenses
Increase income
7/29/2019 Investment Planning for Retirement
17/35
What is your wealth?
Correct measure of wealth is known
as net worth
7/29/2019 Investment Planning for Retirement
18/35
Net worth = assets liabilities
Assets = what you own
Liabilities = what you owe
7/29/2019 Investment Planning for Retirement
19/35
7/29/2019 Investment Planning for Retirement
20/35
RISK AND RETURN
7/29/2019 Investment Planning for Retirement
21/35
Risk and Return
Risk and investing go hand in hand
Risk increases as the expected
potential return increases
No-risk, whats that?
Manage the risks
7/29/2019 Investment Planning for Retirement
22/35
The eighth wonder -
compounding Rs.1 lac invested @ 10%
Year Simple interest
@ 10% p.a.
Compound interest
@ 10% p.a.
1 1,10,000.00 1,10,000.002 1,20,000.00 1,21,000.00
3 1,30,000.00 1,33,100.00
4 1,40,000.00 1,46,410.00
5 1,50,000.00 1,61,051.00
20 3,00,000.00 6,72,749.99
25 3,50,000.00 10,83,470.59
30 4,00,000.00 17,44,940.23
7/29/2019 Investment Planning for Retirement
23/35
WHAT IS INFLATION?
7/29/2019 Investment Planning for Retirement
24/35
Effects of Inflation
Item Price in
2001-02
Price in
2009-10
Sugar (1 kg) Rs. 16 Rs. 40
Cooking oil (5 liters) Rs. 290 Rs. 500
Rice (1 kg) Rs. 14 Rs. 35
Petrol ( 1 liter) Rs. 33.46 Rs. 48.83
7/29/2019 Investment Planning for Retirement
25/35
Inflation Effects on Investments
InvestmentInitial investment Rs. 1,000
Interest on investment 5% p.a.
Value after a year Rs. 1,050
Inflation 6% p.a.
Your expenses after a year Rs. 1,060
7/29/2019 Investment Planning for Retirement
26/35
Retirement Planning
Start early and retire peacefully
Plan wisely
Track and review your plan
Dont dip into your retirement savings
7/29/2019 Investment Planning for Retirement
27/35
Investment needed to create
retirement fund
7/29/2019 Investment Planning for Retirement
28/35
Investment commandments Clear and reasonable goals All investments carry risk
Diversify to reduce risk
Select appropriate asset mix
Recognise limits of your knowledge
Do your homework
Income-tax is payable on investment returns
Avoid investing on basis of hot tips and rumours
Dont follow advice you do not understand
Say NO if you are not convinced
Dont take risks you cannot afford or are not
comfortable with
7/29/2019 Investment Planning for Retirement
29/35
CHOOSING THE RIGHTINVESTMENT OPTIONS
7/29/2019 Investment Planning for Retirement
30/35
Safety
ReturnsLiquidity
7/29/2019 Investment Planning for Retirement
31/35
Investment Vehicles and
Insurance Products
7/29/2019 Investment Planning for Retirement
32/35
Avoid investment scams
7/29/2019 Investment Planning for Retirement
33/35
CONCEPTS OF ESTATE
PLANNING
7/29/2019 Investment Planning for Retirement
34/35
Power of attorney
Nomination
Will
Assignment of insurance policies
7/29/2019 Investment Planning for Retirement
35/35
THANK YOU