You are an investment advisor who has been approached by a client for help on his financial strategy. He has savings of ₹250,000. He is 55 years old and expects to work for 10 years more.

a. Once he retires in 10 years from now, he would like to withdraw ₹80,000 per annum for the next 25 years. (His actuary tells him he will live up to the age of 90 years.) How much would he need 10 years from now to be able to withdraw the said amount?

b. How much of his income would he need to save each year for the next 10 years to be able to afford these planned withdrawals (₹80,000 per year)?

c. Assume that in 10 years from now, the interest rates decline to 8 per cent. How much, if any, would your client have to lower his withdrawal every year assuming that he still plans to withdraw cash each year for the next twenty-five years?