Karthik is a software professional working with a reputed IT firm in Bangalore City. His first salary was equal to his fathers last drawn salary. Karthiks father Mr. Raghavan, a chartered accountant by profession is very proud that his son earns a very attractive salary and thankful to God for showering blessings on his family. However, he is just as tensed. He believes he could retire peacefully because he had saved enough for himself and his wife. During his earning tenure, Public Provident Fund (PPF) fetched double digit returns. He wonders if his son would retire as comfortably as he could. Karthik likes to live life king size. He saves money regularly only to spend lavishly on things he like.

Raghavan feels , if Karthik doesnt take savings seriously, he might repent later in his life. Raghavan of late has been taking keen interest in advising his acquaintances on investing in various financial instruments. He believes retirement planning is a science. A newspaper article recently mentioned that if your spending Rs. 40,000 monthly now and if the inflation @ 5% continues, after 30years , you may need Rs. 1,78,710 per month for a modest living. Karthik, feels he has many more years to retirement and could start saving seriously may be after 5 years. However Mr. Raghavan quickly scribbled the following piece of calculation and gave it to Karthik.

	Invest Now	After 5 Years
Monthly investments (in Rs)	10,000	10,000
Tenure in (Years)	30	25
Return assumption (compounded annualised)	12%	12%
Corpus at the end of tenure (In Rs)	3.5 crore	1.9 crore

1. Is retiring rich an illusion for millennials (and retiring poor a reality)?

2. A delay of five years can cost karthik Rs 1.6 crore. Why?

3. What is your advise to Karthik? Construct a realistic saving plan for him considering the current market conditions in India. Make appropriate assumptions wherever required.