Know About Retirement Planning & Mutual Funds at Mirae Asset

1. 1 RETIREMENT PLANNING & MUTUAL FUNDS

2. Content Retirement data at a glance Why retirement planning? Factors affecting retirement Steps of a mutual fund led retirement plan – an illustrative plan

3. Source: netcredit.com, data as on November 2020

4. Source: netcredit.com, data as on November 2020

5. Total pension funds assets of selected countries in 2020 TOTAL PENSION FUNDS ASSETS ( IN BN USD) USA population of 32 crores in 2020 has pension fund assets of 35 Trillion USD US pension fund corpus is 10 times the next country which is the UK India population of 138 crores in 2020 and pension schemes of 249 Billion USD Source: https://www.statista.com. Data is as of end 2020 published in 2021. Population data source – World Bank report 2020

6. Retirement aspirations could be costly Global survey of workers and retirees on their most important aspirations for retirement Traveling 60% Pursuing new hobbies 49% Continue working in the same field 16% Living abroad 14% Starting a business 10% Continue working, but in another field 13% Studying 15% Volunteer work 27% Spending more time with friends/family 57% Source: Raconteur, ING 2019

7. Percentage of Working Population (15-64 age bracket) The working age population is defined as those aged 15 to 64. This indicator measures the share of the working age population in total population India is the major economy which shows rise in working population Source : OECD Data (2022), Working age population (indicator).

8. Life Expectancy Data for Major Economies LIFE EXPECTANCY (In Yrs) - 1970-2022 India S. Korea USA Canada Indonesia Japan China Year 2022 1970 India 70.19 47.41 48% S. Korea 83.35 60.81 37% USA 79.05 70.78 12% Canada 82.81 72.49 14% Indonesia 72.14 52.24 38% Japan 84.91 72.16 18% China 77.3 57.95 33% Change in 50 years Source: As of 2022, https://www.macrotrends.net/countries, www.Worldbank.org

9. Summary Indians average life span has gone up to 48% in the last 50 years While majority of the population is joining work force, they need to plan; For longer living age Inflation impact in household expenses over decades Possibly lower working tenure Healthier life from the age of 60 onwards due to better medical access and affordability An excerpt of Ministry of Finance’s report in 2019 on India’s Demography at 2040 : Planning Public Good Provision for the 21st Century India's health life expectancy at the age of 60 which is the average number of years a 60 year old person is expected to live in full health taking into account the impact of diseases and injuries has continually increased over the years for both men and women. Healthy life expectancy at the age of 60 now stands at 12.9 years (12.5 years for males and 13.3 years for female). Given that life expectancy for male and female in India is likely to continue rising, increasing the retirement age for men and women could be considered in line with the experience of other countries. This will be key to the viability of pension systems and also help increase female labour force participation in the older age groups. Source :Population data from statista.com as on end of 2021

10. The Suggested Framework for retirement planning – An illustration 02 Asset Allocation Based on the timelines of needs, get the asset allocation. Glide path to retirement. Check & review 04 Withdrawal Getting the investment take care of cash flows if needed. Growth rate after retirement Long term/ recurring Bucketing / Segregation Core Guide Asset Allocation Accumulation After Asset Allocation, time invested and therefore compounding may result in the required corpus Segregation Start with a clear break up of recurring needs & long term retirement corpus need. How not to dip into each other 01 Compounding Accumulation 03 Systematic Withdrawal Plans (SWP) Withdrawal

11. Segregation 01Clear Assessment of recurring needs – short & medium term outflows 02Assign an amount for such planned & unplanned needs. Needs on the path to retirement Bucketing with a purpose Plan is an accumulation of many goals. Investments strive to achieve the need on the due timelines. Needs come up on set time tables so investments needs to fulfil objective on time Cross pollination avoided Separate plans help achieve separate goals GOAL 01Make a grounds up requirement of corpus Plan time to retirement, need assessment Realistic assessment for the future 02Inflation & income escalation hereon

12. Different investment behavior Contribution No Contribution Final Value 23 years Staying the course Rs 1,88,57,029 Start, Stop, stay invested Rs 1,50,33,448 10 years No Contribution, No Withdrawal Rs 38,23,581 Start late No Contribution 13 years Rs 36,88,467 Start, Stop & exit No Contribution & Full Withdrawal 10 years Jan-2000 Jan-2010 Feb-2023 Total Years of SIP Investment @ ₹ 10,000 p.m Source: AceMF, Amount invested in Nifty 50 Index (TRI) from Jan-00 to Feb-23 on every 10th day of the month. . The data shown above pertains to the Index and does not in manner indicate performance of any scheme of the Fund. Past performance may or may not be sustained in the future. Inflation and taxes are not considered while computation of the returns.

13. Separate Instrument for Each Recipe Rs. 1.96 Crs. Rs. 1.81 Crs. Redemption Rs 10 lakh for a family emergency of Rs. 1.47 Crs. Redemption of Rs 3.0 lakh for a holiday Redemption of Rs 70K for gadget Rs. 1.01 Crs. Jul-99 Feb-23 Discipline Long term cost of funding electronics gadget Electronic gadget + Holiday Electronic gadget + Holiday + Family emergency Scenarios Amount Invested at Yr 0 Current Amount Opportunity Cost Rs. 10 lakhs Rs. 10 lakhs Rs. 10 lakhs 0 Rs. 1.96 crores Rs. 1.81 crores Rs. 1.47 crores Disciplined Investment Long Term Cost of Funding Gadget Phone + Holiday Rs. 15 lakhs Rs. 49 lakhs Rs. 95 lakhs Rs. 10 lakhs Rs. 1.01 crores Phone + Holiday + Family Emergency This is an illustration to highlight how dipping into investment periodically reduces the corpus when needed Source: AceMF, Amount invested in Nifty 50 Index (TRI) since July-1999 . The data shown above pertains to the Index and does not in manner indicate performance of any scheme of the Fund. Past performance may or may not be sustained in the future. Inflation and taxes are not considered while computation of the returns.

14. Asset Allocation Glide Path As time passes by, the portfolio may reducing exposure growth assets and move towards income assets. Monitoring Every asset allocation plan can be accompanied with regular monitoring, rebalancing being tactical when needed. The plan is the solution and not the scheme only. start in and RISK Time Frame When funds are needed can be the guiding factor to allocate across all assets. Monitoring To have a pulse on the portfolio risks not only in market risks but inflation adjusted returns. TIME Mutual Funds therefore may be considered as one of the convenient options to invest across asset classes, across time frames with taxation benefits of long term capital gains Consult your tax advisor for final impact of taxation in your desired investment options

15. Allocations become more conservative over time % Asset Allocation POST RETIREMENT PRE RETIREMENT Years to Retirement Hybrids Oriented MFs Equity Oriented MFs Debt MFs Money Market MFs An illustration of how asset allocation may change over a period of time as we near retirement & post retirement

16. Accumulation PHASE 1 Start of investment could be based on past data PHASE 2 Exposure to cycles PHASE 3 Consider action and impulse to react to change PHASE 4 Impact of staying invested EXPERIENCE EXPECTATIONS Continuous tracking and concluding on the choice –Buyer’s remorse Sideways experience may lead to frustration and exit calls. In this phase, staying invested across cycles may showcase returns The impact of time induced market cycles

17. Staying Long Term is More Important for Compounding What it Takes to Have Rs 3 Crores as retirement corpus at the age 60, if you start Your SIP at age : 7,09,400 ₹ 1 SIP @ 4,070 p.m for 420 months (35 Years) @ age 25 ₹ 3718,8 SIP @ 10,330 p.m for 360 months (30 Years) 00 @ age 30 Invested SIP @ 16,700 p.m for 300 months (25 Years) ₹ 50,10,000 Gains @ age 35 SIP @ 28,100 p.m for 240 months (20 Years) ₹ 67,44,000 @ age 40 ₹ 1,29,70,800 SIP @ 72,060 p.m for 180 months (15 Years) @ age 45 Illustration of how disciplined investing, staying the course, starting early achieves results than timing. This can be implemented via mutual funds Source: AceMF, Amount invested in S&P BSE Sensex till Dec-2020 when investor is becoming 60 years old. The data shown above pertains to the Index and does not in manner indicate performance of any scheme of the Fund. Past performance may or may not be sustained in the future. Inflation and taxes are not considered while computation of the returns.

18. In Simple terms, Compounding is Just Three Decisions Time in the ^ Market Rate of Return on Asset Class Final Wealth Accumulation Investment

19. In Simple terms, Time has a greater impact on the investment experience Time in the ^ Market Final Wealth Investment Rate of Return on Asset Class ●Decision regarding how long the investor is willing to commit to the investment. ●Time spent with investment allows the rate of return to multiple the investment in geometric fashion.

20. Withdrawal REALITIES MYTHS Retirement investment should start from earliest earnings. One needs to plan for retirement after retirement. Income brackets can be static The applicable tax bracket will be lower post retirement. for long time. One cannot earn after retirement. Employment may cease, investments can still grow. One needs to curtail lifestyle & expenses post retirement. Lifestyle can improve as you spend on what you care about. If one withdraws too much, it will be loss of savings. Your withdrawal rate can be lower than your earning rate.

21. Withdrawal Withdrawal rates should be achieved keeping in mind lifestyle needs. Portfolios can continue to earn while portion of portfolio can used for withdrawals. Systematic Withdrawal Plans (SWP) from Mutual funds are designed for such needs. Strive to create own Annuity plan. WITHDRAWAL RATE RETURN RATE Investments may continue to earn though we may or may not earn. Plan withdrawal amount for normal & emergency sit uations. Be precise in estimating expenses. A net positive, (post inflation & taxes) flows may be achieved.

22. A well planned allocation may help you create comfortable retirement & effective legacy (without inflation) Retirement corpus Monthly Systematic Withdrawal Plan (SWP) Over 21.5 years, withdrawn Corpus remaining after 21.5 years - Rs. 3 Crs - Rs. 1.5 lacs - Rs. 3.9 Crs - Rs. 5.5 Crs 40150000 45150000 Retiremenet Corpus Total Withdrawal 60000000 ₹ 3.9 Crs (Total monthly expense 50000000 3 5O 15 0 00 0r SWP after 21.5 years ) 40000000 30150000 Invested in an asset Compounding @ 8% p/a In ₹ Cr. 25150000 30000000 20150000 20000000 15150000 10150000 10000000 5150000 0 150000 Retirement Period Source: AceMF, Amount invested in NIFTY Composite Debt Index since Sept-01 till March-23. The above chart is for illustration purpose and is not to be construed as guarantee of performance of Systematic investment Plans (SIP) or Systematic Withdrawal Plans (SIP) in mutual funds. Inflation and taxes are not considered while computation of the returns.

23. A well planned allocation may help you create comfortable retirement & effective legacy (with inflation) Retirement corpus Monthly Systematic Withdrawal Plan (SWP) Inflation YoY Over 21.5 years, withdrawn Corpus remaining after 21.5 years - Rs. 3 Crs - Rs. 1.5 lacs with yearly inflation impact - 4.9% (Average since Jan-15 to Feb-23) - Rs. 6.8 Crs - Rs. 49.2 lakhs Retiremenet Corpus Total Withdrawal 40000000 80150000 ₹ 4.9 Crs 35000000 70150000 (Total monthly expense Or 60 15 0 0 0 0SWP after 21.5 years ) 30000000 25000000 50150000 Invested in an asset Compounding @ 8% p/a In ₹ Cr. 20000000 40150000 15000000 30150000 10000000 20150000 5000000 10150000 0 150000 Retirement Period Source: AceMF, Amount invested in NIFTY Composite Debt Index since Sept-01 till March-23. The above chart is for illustration purpose and is not to be construed as guarantee of performance of Systematic investment Plans (SIP) or Systematic Withdrawal Plans (SIP) in mutual funds. Inflation rate stated here is an average of YoY inflation rate from Jan 2015 to Feb 2023. Taxes are not considered while computation of the returns.

24. CONCLUSION CORE PORTFOLIO ASSESSMENT Assess the need, stay the course and not deviate. Don’t borrow from the future to Periodic reviews, impact of economic factors, short & long goals, plan to achieve more not less pay the present WITHDRAWAL ASSET ALLOCATION Withdrawal at the given timelines for core and non core portfolios. Use the money as one has earned it. The guiding framework to reach your goal.

25. Disclaimer The information contained in this document is compiled from third party and publicly available sources and is included for general information purposes only. There can be no assurance and guarantee on the yields or returns. Views expressed by this document cannot be construed to be a decision to invest. The statements contained herein are based on current views and involve known and unknown risks and uncertainties. Whilst Mirae Asset Investment Managers Private Limited (the AMC) shall have no responsibility/liability whatsoever for the accuracy or any use or reliance thereof of such information. The AMC, its associate or sponsors or group companies, its Directors or employees accepts no liability for any loss or damage of any kind resulting out of the use of this document. The recipient(s) before acting on any information herein should make his/her/their own investigation and seek appropriate professional advice and shall alone be fully responsible liable for any decision taken on the basis of information contained herein. Any reliance on the accuracy or use of such information shall be done only after consultation to the financial consultant to understand the specific legal, tax or financial implications. An Investor Education & Awareness Initiative by Mirae Asset Mutual Fund. All Mutual Fund investors have to go through a one time KYC (Know Your Customer) process. Investors should deal only with Registered Mutual Funds. For further information on KYC, RMFs and procedure to lodge a complaint in case of any grievance, you may refer the Knowledge Center section available on the website of Mirae Asset Mutual Fund. Follow us on Mutual fund investments are subject to market risks, read all scheme related documents carefully.

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