Education Fees / Retirement Planning

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Education Fees / Retirement Planning

  1. 1. Education Fees Planning your children’s future
  2. 2. Education School Fees Planning <ul><li>Average per annum rise in University Fees: </li></ul><ul><li>5%-7% per annum (7% for top schools) </li></ul><ul><li>“ The cost of attending public and private universities has consistently </li></ul><ul><li>outstripped the rate of inflation.” </li></ul><ul><li>“ Over the past 5 years, tuition and fees at public institutions rose more </li></ul><ul><li>than at any other time in the past 30 years, increasing by 35 percent”. </li></ul><ul><li>Source: International Herald Tribune </li></ul>
  3. 3. Costs Break Down Based on a Four Year Bachelors Course <ul><li>Fees $100,000 - $140,000 </li></ul><ul><li>Add 5% inflation over 15 year period </li></ul><ul><li>$200,000 - $280,000 </li></ul><ul><li>Living costs (board, food, utilities) $60,000 </li></ul><ul><li>Add regular RPI inflation of 2.5% $78,000 </li></ul><ul><li>Plus </li></ul><ul><ul><li>Books </li></ul></ul><ul><ul><li>Healthcare </li></ul></ul><ul><ul><li>Travel to and from home </li></ul></ul><ul><ul><li>Social spending </li></ul></ul>
  4. 4. Grand Total
  5. 5. Retirement Planning Securing your financial future
  6. 6. Retirement; the reality <ul><li>90% of people that get to retirement age are underinvested. Will this be you? </li></ul><ul><li>Who is responsible for ensuring financial freedom in Retirement? </li></ul><ul><li>How much will you need to have saved in order to retire comfortably? </li></ul>
  7. 7. Timeline 30 yrs 76 yrs 82 yrs 65 yrs Invest money monthly Lump sum to draw down Or take an Income State Company Personal x x a 2.5m workers facing cut in gold-plated final salary pensions Protest as Government pension deficit increases Retirement; the reality
  8. 8. Life Line Establishing your objectives 17 years € 5 0,000 60 years old 43 years old (Retirement age) (Present age) (Income today)
  9. 9. Life Line Establishing your objectives 17 years € 5 0,000 60 years old 43 years old (Retirement age) (Present age) 1st child starts university… Spouse retires… Mortgage paid off Buy property abroad… (Income today)
  10. 10. Life Line Establishing your objectives 17 years € 5 0,000 60 years old 43 years old (Retirement age) (Present age) (Income today)
  11. 11. Life Line Establishing your objectives 17 years (Income today) 60 years old 43 years old (Retirement age) (Present age) € 35 ,000 p.a. (Target income in today’s terms) Objective : Retire on 70% of current income € 5 0,000
  12. 12. Life Line The effect of inflation What will this need to be in the future? Target income (today’s terms) x Inflation factor (years to retirement) = Target income (future terms) € 35,000 x 1.045 = € 48,000 € 48 ,000 p.a. € 35 ,000 p.a. (Target income in today’s terms) (Target income in future terms)
  13. 13. Life Line The effect of inflation 17 years (Income today) 60 years old 43 years old (Retirement age) (Present age) € 48 ,000 p.a. (Target income in future terms) € 5 0,000
  14. 14. Life Line Establishing a target figure Capital sum required at retirement x Projected income yield = Target income (future terms) How much capital will I need? € 48,000 x 5% p.a. = € 960,000 Capital required at 60 (from all sources) € 48 ,000 p.a. (Target income in future terms) € 960 ,000
  15. 15. Life Line Establishing a target figure Capital sum required at retirement x Projected income yield = Target income (future terms) How much capital will I need? € 48,000 x 5% p.a. = € 960,000 Capital required at 60 (from all sources) € 960 ,000
  16. 16. Life Line Establishing a target figure 17 years € 5 0,000 (Income today) 60 years old 43 years old (Retirement age) (Present age) € 960 ,000 Capital required at 60 (from all sources)
  17. 17. Life Line Establishing a target figure 17 years € 5 0,000 (Income today) 60 years old 43 years old (Retirement age) (Present age) € 960 ,000 Capital required at 60 (from all sources) Existing benefits Frozen schemes € 200,000
  18. 18. Life Line Establishing a target figure 17 years € 5 0,000 (Income today) 60 years old 43 years old (Retirement age) (Present age) € 960 ,000 Capital required at 60 (from all sources) PENSION GAP € 760 ,000 Additional capital required at age 60 Existing benefits Frozen schemes € 200,000
  19. 19. Life Line Plan of action Average monthly investment to achieve goal Projected growth over 17 years Pension Gap How much should I be saving? € 300,000 10% p.a. €1,000 p.m. € 1,000 p.m. Average monthly investment required € 760 ,000 Additional capital required at age 60
  20. 20. Life Line How much should you be saving? 17 years € 5 0,000 (Income today) 60 years old 43 years old (Retirement age) (Present age) Average monthly investment required € 1,000 p.m. € 760 ,000 Additional capital required at age 60 Existing benefits Frozen schemes € 200,000 PENSION GAP
  21. 21. Retirement Investment Work with your advisor to maintain correct risk profile Retirement Plan Investment Portfolio Fixed Income Global Bond Euro Fund US Fund BRIC Fund Energy Fund
  22. 22. So how much do you need? <ul><li>Are you on target to retire when you want to? </li></ul><ul><li>Will you retire how you want to? (mortgage paid off, school fees set aside, enough for both spouses, retire early...) </li></ul><ul><li>Do you know how your other pensions are performing? (do you have “frozen” pensions?) </li></ul>Are you doing enough?

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