Abood is thinking about retirement. He is 32 years old. His current annual income is $108000 and this income will increase at a 5% rate annually. His lump sum needed for retirement is 8,906,999.67 and his value of financial resources available for retirement is 2,056,513. :. He wants to retire at his normal retirement age which is 55, and his life expectancy is 75. The rate of return during retirement is 6%, and inflation is 4%, and his retirement Gap is 6,850486.48.

Note : 1. Rate of return during retirement is 6%. 2. Inflation rate is 4% 3. Salary growth rate is 4.5% 4. EPF contribution is 23% of annual salary. 5. NO future saving on unit trust. 6. The first year retirement income (calculated in todays dollar) is 70% of the salary. 7. client is assumed to remain in the retirement period until age 75.

Please prepare a retirement plan sheet including your calculations in an excel file for the client. And prepare:

1) EPF projection, capital liquidation, determining whether a retirement gap exists, and your chosen method to fill up the gap (if necessary).

2. Prepare a retirement plan adopting a capital conservation approach, whereby the client prefers to have a minimum sum of RM500,000 available for their dependent. PLEASE SHOW ALL WORK AND EQUATIONS USED IN EXCEL.

Statement of Net Worth as at 31/12/2019 RM RM 1 3 Refer Sheet2 48,000 4 5 36,000 6 7 2 Cash/Cash equivalent Savings account Fixed deposits Life insurance cash value (for estate) Investment assets Quoted Stocks & Shares (for retirement) 8 Unit trusts (for retirement) 9 EPF balance (for retirement) 10 Condominium (for estate) Unquoted share (for estate) 12 Apartment (for retirement) 13 Foreign FD (for education) Personal used assets Residence (for estate) 75,000 Refer Sheet2 Refer Sheet2 325,000 11 180,000 250,000 100,000 14 670,000 15 365,000 16 Car 95,000 Jewelleries (for estate) 17 85,000 18 Home furnishing 75,000 19 50,000 Golf club membership (for estate) TOTAL ASSETS 20 21 22 Current liabilities... 112,000 23 LT liabilities 345,000 24 Total liabilities 457,000 25 Net worth 26 NET WORTH + LIABILITIES Client Current Age Retirement Age Current Annual Salary Investment Asset Existing Unit EPF@5.5% trust@8% 173,880 200,000 1 32 55 108000 Statement of Net Worth as at 31/12/2019 RM RM 1 3 Refer Sheet2 48,000 4 5 36,000 6 7 2 Cash/Cash equivalent Savings account Fixed deposits Life insurance cash value (for estate) Investment assets Quoted Stocks & Shares (for retirement) 8 Unit trusts (for retirement) 9 EPF balance (for retirement) 10 Condominium (for estate) Unquoted share (for estate) 12 Apartment (for retirement) 13 Foreign FD (for education) Personal used assets Residence (for estate) 75,000 Refer Sheet2 Refer Sheet2 325,000 11 180,000 250,000 100,000 14 670,000 15 365,000 16 Car 95,000 Jewelleries (for estate) 17 85,000 18 Home furnishing 75,000 19 50,000 Golf club membership (for estate) TOTAL ASSETS 20 21 22 Current liabilities... 112,000 23 LT liabilities 345,000 24 Total liabilities 457,000 25 Net worth 26 NET WORTH + LIABILITIES Client Current Age Retirement Age Current Annual Salary Investment Asset Existing Unit EPF@5.5% trust@8% 173,880 200,000 1 32 55 108000