Inflation is set at 6 per cent per annum (for preretirement and post-retirement phases) Education goals have been inflated by 10 per cent per annum.
Medical inflation is set at 12 per cent per annum.
Income growth rate is assumed to be 12 per cent per annum until 2023, 8 per cent per an num during 2024-28 and after that, 5 per cent per annum until retirement.
Returns are set at 7 per cent per annum post retirement.
Life expectancy is assumed to be 85 years for Rohit and 90 years for Maya.
The retirement corpus required has been calculated to provide for expenses from 2040 onwards until Maya’s life expectancy. All expenses post-2040 are assumed to be paid from this corpus.
All values taken as income, expenses and assets are current values.
Assumed home loan interest is at an average rate of 10 per cent for 20 years and the car loan at 11 per cent per annum for five years. Insurance premiums towards existing life insurance policies have been considered until the premium-paying terms of the respective policies.
Health insurance premiums are inflated by six per cent per annum.
Savings refers to the funds accumulated through investments and includes monthly net savings, assumed to be invested with posttax returns of 9.66 per cent per annum.
Post-tax returns assumed per annum: a. Mutual funds: Portfolio rates b. EPF/PPF: 7 per cent per annum