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food trading company. Mutual fund is managed by the professional so that Billy saveshis time in investment. Besides, mutual fund offers higher interest rate than fixeddeposit account which is around 4%-5%. Otherwise, I also suggest Belly investing in the long term period investment which is PRU linked retirement growth. It is the single premium for investment-linked insurance plan pays a monthly guaranteed income. Their pay-out stage will based on your selected terms for the accumulation and pay-out stages, your annual guaranteed income (payable monthly) is determined as a percentage of the gross single premium (refer to the table below)This insurance encourage the age between 30 to 60 years old who wants to meettheir retirement goals. 95% of single premium will invested in the PRU linked goldenequity fund, golden bond fund and golden managed fund (pay-out stage).The policy says that upon survival in each month of the pay-out period, themonthly guaranteed income will be paid out. In the cases, we know that Belly is now38 years old to reach his retirement age which is 60 years old we have 22 years toaccumulate the money to achieve Belly retirement goals. Let’s assume that we pay asingle premium of RM 950,000 today we choose to accumulate funds for over 20years and the pay-out period will be 20 years at 7.75% Billy will start receiving theannual guaranteed income of RM73,625 per year. By the end of the stage Billy willreceive the remaining fund value in lump sum payment on top of the guaranteedmonthly income that have already received. Your funds’ performance will haveunstable value but then Jack still will receive the yearly guaranteed income during thepay-out stage, which is RM73,625 for 20 years = RM1,472,500.15
Retirement Need AnalysisBilly Retirement Capital Requirement (WANT)Beginning ModePMTRM120,000n20 yearsP/Y1 yearI/Y3% (7%-4%)PVRM1,838,855.89At the age of 60, Billy will need to have RM1,838,855.89 so that he can withdrawRM120,000 annually for 20 years. Accumulation of Fund (HAVE)EPFPVRM150,000N60years old-38years old=22I/Y5FVRM438,789.11InvestmentPVRM100,000N60years old-38years old= 22I/Y7FVRM443,040.17TOTAL RM881,829.2816
Shortfall (NEED)WANTRM1,838,855.89- HAVE(RM881,829.28)NEEDRM957,026.61Billy experiences a shortfall of RM957,026.61. By the age of 60, Billy need thisamount of money in order to achieve his goal of getting RM120,000 annually for 20years. 17
Recommendation However, in order to achieve this goal effectively, Billy can consider the useof compounding effect of interest rate. Billy can invest his money in the financialmarket such as stock market or bond market. In this case, I would recommend Billy toinvest in mutual fund. Mutual fund is suitable for Billy as Billy is a boss of onlinefood trading company. Mutual fund is managed by the professional so that Billy saveshis time in investment. Besides, mutual fund offers higher interest rate than fixeddeposit account which is around 4%-5%.