National Pension Scheme: I invest Rs. 6870 per month in NPS. My present age is 38 years. By 60 years of age, how much will be my corpus?
Short Answer : 38.60 LakhsLong Answer : -NPS stands for National pension scheme. As the name suggests, it is a pension scheme and mandated for all Central Govt. employees.Each month the total contribution in your name is invested in 85% of debt securities and 15% equity. The net return for NPS from March 2010 to May 2013 is an impressive 11.56%. Then came the rupee slide and the bond crash. The net return from March 2010 to August 2013 is 6.8%. So it fluctuates! and yes, quite a deal.Basis the information provided and making some assumptions, I made the quick calculations.Year = your ageSal = Your annual salary increasing at 5% annuallyContribution = Your annual contribution to NPS (i.e. 10% of Annual salary)Cumulative contribution = All your previous contribution + current contributionEquity (15%) = Equity component of your NPS contribution invested in equitites.Debt (85%) - Debt component of your NPS Contribution invested in DebtsReturn on Equity portion (@12% Annually) = Return on your investment in Equity component compounded annually at assumed rate of return of 12%.Return on Debt Portion (@ 8% Annually) = Return on your investment in Debt component compounded annually at assumed rate of return of 8%.
If my monthly gross salary is precisely INR 40,000 , how much will I be paying as tax per month? Can I in any way save that tax?
Your total salary(including all deduction) over the year - 12*40,000 = 4,80,000/-Basic (40% of CTC) - 1,92,000/Year or 16,000/monthHRA - 76,800/- or 6400/monthFor now lets assume that rest all fall under basket of allowances which is - 2,11,200/year or 17600/monthDeductionsEmployee PF (12% of basic) - 23,040/year or 1920/monthEmployer PF (12% of basic) - 23,040/year or 1920/monthIf you are an IT employee then professional tax - 2400/ year pr 200/monthNet salary after the above deductions - (480000–23040–23040–2400)4,31,520/-we can below allowance which does not need proof to be submitted.Transport allowance - 19200/year and this amount is fixed.Meal allowance if any - maximum of 26400/yearDeclare HRA if you are staying in Rented house, So you can save 76800/- by submitting rent receipts.Now the net salary after the above allowances would be (431250–76800–19200–26400) 335250/-Now since your net salary after all the deductions and allowances claimed you are eligible for tax rebate of 5000/-Now the taxable salary is (335250–250000) - 85250.Considering 2016–17 tax slab, you need to pay 10% tax i.e 3525/year or 293/month (8525–5000 rebate)Now if you want to save 3525 , Take a Term Insurance or LIC or Invest in ELSS for 35350/-.Hope this helps :)
Please someone who understand math.... :(?
The first payment is at age 34.5, and you want the future value at age 50. She makes makes payments every 6 months. Since her 50th birthday falls on a payment due date, I would assume that a payment is made on that date also. There are a total of 32 payments. The first payment of the 32 payments accumulates for 15.5 =years (31 semi-annual periods), the last for 0 (it's paid on and valued on her 50th birthday. The accumulated value is: 1000 x (1.045^31 + 1.045^15 + ... + 1.045^1 + 1.045^0) = 1000 x (1.045^32 -1) / (1.045 -1) = 68666.24524 As far as a timeline goes, I'd start it at the time of the first payment and continue it to 15.5 years. I'm not sure what you are using the timeline for. If it's to understand/illustrate when the payments are made, I'd suggest an age line running from 34 or 34.5 to 50. If you are using the timeline to value the payments using some formula, it doesn't really matter. For example, you could get the PRESENT value of the payments using an annuity due formula at age 34.5, then accumulate it to age 50 using (1.045)^31. The annuity factor is (1-v^32)/(1-v) where v = 1/1.045. This works out to: 17.54439095 x3.913857451 68.66624524 x 1000 =same answer as before, 68666.24524 You can take the present value anywhere so long as you accumulate it to the proper time.
Megan made contributions to a Roth IRA over the course of 29 working years. Her contributions averaged $2,250?
Megan made contributions to a Roth IRA over the course of 29 working years. Her contributions averaged $2,250 annually. Megan was in the 24% tax bracket during her working years. The average annual rate of return on the account was 4.5%. Upon retirement, Megan stopped working and making Roth IRA contributions. Instead, she started living on withdrawals from the retirement account. At this point, Megan dropped into the 20% tax bracket. Factoring in taxes, what is the effective value of Megan’s Roth IRA at retirement? Assume annual compounding. How do I solve this? I know the answer is $113,541.82, just unsure how to get it mathematically.