254) How to Increase Your Unit Trust Units Easily?

254) How to Increase the No of Unit Trust Units Easily?

This is an interesting question that will always excite Unit Trusts Consultants and Investors.

There are few ways as listed here, from the most difficult to the easiest..

1) Invest more money

Basically means you buy more units and accumulate more. The more you invest, the more units you get. 

2) Reinvest the Distribution

When the fund declared distribution, do not pay out to your bank account.Inform the Unit Trust Management Company to buy more units using the distribution amount.You can set it to be Auto-Reinvest for you to accumulate more units.

3) Invest into Funds with lower Unit Price

Number of units = Investment Amount / Unit Price

For example:

Assume Service charges are calculated separately.

Fund A is RM0.80 per unit. 

When you invest RM1,000, you will get 1000/0.80 = 1250 units.

Fund B is RM0.25 per unit. 

When you invest RM1,000, you will get 1000/0.25 = 4000 units.

Investing into cheaper units will give you more units.

4) Switching

Using the same formula above, you will get more units when you SWITCH from a higher unit price into a lower unit price funds.

Using thee same example above. 

Assume Service charges are calculated separately.

.

When you buy into Fund A, you get only 1250 units.

When you switch to Fund B, you get 4000 units.

An immediate increase of 4000 - 1250 = 2750 more units.

This example is also to show you that Number of Units does not tell the full story.

The full formula is:

Asset Value =  No of Units x Unit Price

Units Accumulation is only half of the wealth story.

For an example outside of unit trust, we can use cars.

Do you prefer 1 car or 10 cars?

You definitely will ask which car types. 

You will take 1 car if the car is a Lamborghini Huracan as compared to 10 Perodua Kancils.

(I apologize to Perodua Kancil and their owners)

Lamborghini Huracan

Perodua Kancil

Now you know why Quantity alone is only half of the equation.

More related articles:

Lower vs Higher Unit Price of the Unit Trust Funds
https://highlevelrules.blogspot.my/2018/01/lower-vs-higher-unit-price.html


Benefits of Distribution in Unit Trust:
https://highlevelrules.blogspot.my/2017/11/benefits-of-distribution-in-unit-trusts.html

Difference between Dividend vs Distribution

https://highlevelrules.blogspot.my/2017/11/dividend-vs-distribution.html 

  

253) Why My Unit Trust Fund Did Not Give Distribution?

Why my fund giving less distribution this year?

Why my fund distribution is giving less than the other fund? 

Why No Distribution this month?

Is my fund not as GOOD as compared to the other fund?

Many Questions about a fund comparing to another fund. It reminds us of the old English Proverb

"The grass is greener on the other side"

When you compare different funds on the distribution, do take these points into considerations:

1) Financial Year End

A Unit Trust fund normally gives distribution on the fund's Financial Year End. If a fund did  not declare a distribution last month, most probably that it is not its financial year end yet.

There are funds that give yearly, semi-annually, monthly or incidentally. It depends on the fund's distribution policy. 

A Unit Trust Management Company will have different funds to have different Financial Year Ends. It is basically to avoid overcrowding or overloading all the funds reporting at the same time.

2) Distribution Policy

Every fund has its own distribution policy stated in the prospectus. Depending on the policy, distributions are paid out accordingly.

a) Annual - once a year on best effort basis

b) Semi-Annual - twice a year on best effort basis

c) Monthly - monthly on best effort basis

d) Incidental - depend on market performance

The Unit Trust fund give or not give any distribution is decided by the Fund Manager. It depends on the fund strategy, accumulated values, market conditions and future market outlook.

There are a few main fund types: 

a) Equity

b) Mixed Asset/Balanced

c) Bond

d) Money Market

Depending on the fund types, the distribution policies are also different. Generally, Equity funds tend to have more incidental distribution policy. Bond and Money Market funds tend to have more Annual distribution policies.

3) Fund Price

The distribution amount to be paid out also depends on the current fund unit price. 

You can expect a higher distribution amount from a higher fund price.

For example: 

Fund A: $1.00 fund distribute out $0.05 is 5% of its fund price.

Fund B: $0.25 fund distribute out $0.05 is 20% of its fund price.

It will be more difficult to distribute 20% as compared to 5%.

Note: Distribution Yield is calculated as Distribution amount/Fund Price after distribution

Fund A Distribution Yield = $0.05/$0.95 = 5.3%

Fund B Distribution Yield = $0.05/$0.20 = 25%

As a summary, Distribution payment is not an indication of the fund's performance. 
Check the fund's actual performance by reading the Annual Report and Performance Graphs.

Distribution payment is more on the Fund Manager's fund management strategy.

Do focus on your:

a) Investment objectives

b) Time Horizon

c) Risk Profile

For more information, please consult your Unit Trust Consultant.

More related articles:

226) No Distribution? Did the Fund Make Money?

https://highlevelrules.blogspot.com/2019/06/226-no-distribution-did-fund-make-money.html

250) Distribution Yield vs Total Return

https://highlevelrules.blogspot.com/2020/05/250-distribution-yield-vs-total-return.html

132) Differences between Dividend vs Distribution.

http://highlevelrules.blogspot.com/2017/11/dividend-vs-distribution.html

133) Benefits of Distribution.
http://highlevelrules.blogspot.com/2017/11/benefits-of-distribution-in-unit-trusts.html

252) Bond Fund Performance When OPR Reduced

252) Bond Fund Performance When OPR Reduced

Have you wondered what happens to a typical Unit Trust Bond fund when the Bank Negara Malaysia reduces the Overnight Policy Rate (OPR)?

See for yourself the performance over the last 4 OPR reductions.

Source: https://www.bnm.gov.my/index.php?ch=mone&pg=mone_opr_stmt

1) OPR reduced 0.25% from 3.25% to 3.00% on 7 May 2019
2) OPR reduced 0.25% from 3.00% to 2.75% on 22 Jan 2020
3) OPR reduced 0.25% from 2.75% to 2.50% on 3 Mar 2020
4) OPR reduced 0.50% from 2.50% to 2.00 on 5 May 2020

1) OPR reduced 0.25% from 3.25% to 3.00% on 7 May 2019

A typical bond fund performance from 1 Apr 2019 to 31 May 2019.
The Bond fund performance increased more than previous rates.

2) OPR reduced 0.25% from 3.00% to 2.75% on 22 Jan 2020

A typical bond fund performance from 1 Jan 2020 to 29 Feb 2020.
The Bond fund performance increased more than previous rates.

3) OPR reduced 0.25% from 2.75% to 2.50% on 3 Mar 2020

A typical bond fund performance from 1 Feb 2020 to 31 Mar 2020.
The Bond fund performance maintained for a short while and then turned negative. This could be the effect of foreign bond investors taking profit and sell off their bonds after the recent 3 OPR reductions in 2020. The Ringgit depreciation against other currencies also affect the bond values.

Foreigners sold RM17.8b Malaysian bonds, equities in March — highest since May 2018
https://www.theedgemarkets.com/article/foreigners-sold-rm178b-malaysian-bonds-equities-march-%E2%80%94-highest-may-2018-0

For more readings on what affects bond prices link below:
http://highlevelrules.blogspot.com/2020/03/241-factors-affect-bond-prices.html

4) OPR reduced 0.50% from 2.50% to 2.00 on 5 May 2020

A typical bond fund performance from 1 Apr 2020 to 6 May 2020.
The Bond fund performance increased more than previous rates with more bond investors expected further OPR rate cuts.

News published on 3 Apr 2020 on BNM Annual Report 2019: 2020 Monetary policy to support economic growth amid subdued inflation.
https://www.theedgemarkets.com/article/bnm-annual-report-2019-2020-monetary-policy-support-economic-growth-amid-subdued-inflation

News published on 23 Apr 2020 on BNM expected to cut OPR by another 75 basis points.
https://www.theedgemarkets.com/article/bnm-expected-cut-opr-another-75-basis-points-%E2%80%94-cgscimb

News published on 30 Apr 2020 on BNM seen slashing OPR by 50bps.
https://www.theedgemarkets.com/content/evening-5-bnm-seen-slashing-opr-50bps-0

Bond Fund Performance since 1 Jan 2020

A typical bond fund performance from 1 Jan to 6 May 2020 when there were 3 OPR reductions in 2020.

Bond Fund Performance since 1 Apr 2019

A typical bond fund performance from 1 Apr 2019 to 6 May 2020 when there were the 4 OPR reductions.

Bond Fund Performance since 10 May 2010 to 6 May 2020

Bond Fund = 68%
12 Month FD = 36%

We can summarize that Bond Funds gives a better return than Fixed Deposit in the longer term. Furthermore, bond funds have more fluctuations due to other factors affect the bond prices.

Please contact and discuss with your Financial Consultant on the financial options available for you.

Other Related Articles

241) Factors Affect Bond Prices

http://highlevelrules.blogspot.com/2020/03/241-factors-affect-bond-prices.html

239) Bond Specification & Calculation

https://highlevelrules.blogspot.com/2020/03/239-bond-specification-calculation.html

230) Differences between investing into Bond Market vs Bond Fund 

http://highlevelrules.blogspot.com/2019/07/330-bond-market-vs-bond-fund.html

222) Does Bond Fund Move Opposite to Equity Fund?
http://highlevelrules.blogspot.com/2019/03/222-does-bond-fund-move-opposite-to.html

22) Bond Price Moves Opposite to Bond Yields
https://highlevelrules.blogspot.com/2017/06/bond-price-moves-opposite-to-bond-yields.html

48) Money Market Fund vs Bond Fund
http://highlevelrules.blogspot.com/2017/07/money-market-fund-vs-bond-fund.html

61) Unit Trust Bond Fund Vs Fixed Deposit
http://highlevelrules.blogspot.com/2017/07/unit-trust-bond-fund-vs-fixed-deposit.html

251) How Total, Annual & Annualized Returns are Related

251) How Total, Annual & Annualized Returns are Related

How many of you are confused between the different Returns terms used?

a) Total Return
b) Annual Return
c) Average Total Returns
d) Annualized Return

Have you wondered how the Returns are related?

The graph above shows the relationships between the different returns terms.

The Black fluctuating line is the investment performance.
The 3 Green straight joining lines are the 3 Annual Returns.
The Red line is the Total Return.
The Blue sloping upward exponential curve is the Annualized Return. It is sloping because the effect of compounding. The value increases faster as over the years.

Let us look at the relationships below and understand the differences.

FV = PV(1 + i)^n
FV = PV((1+i1)(1+i2)(1+i3)…(1+in))

(1+TR) = (1 + i)^n
FV = PV(1 + TR)
TR = (FV – PV)/PV
where
FV = Future Value (End Value)
PV = Present Value (Begin Value)
i = Annualized Return
in = Annual Return for year n
n = No of years
TR = Total Return for n years

A) Total Returns (TR)

From the basic formula of investment:

Total Return = (End Value - Begin Value)/Begin Value
TR = (FV - PV)/PV

For Total Return, the period can consist of 1 year or many years. It calculates from the beginning to end of the investment.

If the period is only 1 year, then it is the same as Annual Return.

B) Annual Return (in)

Annual Return basically means the investment return for only 1 year period. Each year will have its own Annual Return.

Example: 

i1 = Annual Returns for 1 Jan 1st year to 31 Dec 1st year.

i2 = Annual Returns for 1 Jan 2nd year to 31 Dec 2nd year. 

i2019 = Annual Returns for 2019 means the investment return from 1 Jan to 31 Dec 2019. 

i2020 = Annual Returns for 2020 means the investment return from 1 Jan to 31 Dec 2020.

It is the same as Total Return for 1 year period.

TR1 = i1 = (FV1 - PV1)/PV1

Annual Return for 2019  = (Value in 31 Dec 2019 - Value in 1 Jan 2019)/Value in 1 Jan 2019

i2019 = (FV in 31 Dec 2019 - PV in 1 Jan 2019)/PV in 1 Jan 2019

The Total Returns for many years are the compounded value of many Annual Returns. 

Total Return for n years:

1+TR = (1+i1)(1+i2)(1+i3)...(1+in)

C) Average Total Returns (ATR)

Average Total Return is simply the Total Return divided by the number of years of the investment.

ATR = TR/n

D) Annualized Returns (i)

Annualized Returns is the Total Return that is re-scaled to a period of 1 year. 

This means that if you keep compounding the same Annual Return value, you will get the Total Return.

(1+i)^n = (1+i1)(1+i2)(1+i3)…(1+in)  = (1+TR) 

Let us apply an example to the formulas.

You invested $1,000 on 1 Jan 2017.

In 2017, the Annual Return = 5%

In 2018, the Annual Return = 8%

In 2019, the Annual Return = -4%

a) What is the Total Return rate, TR?

b) What is the Average Total Return, ATR?

c) What is the Annualized Return rate, i?

d) What is the Investment Value after 3 years on 31 Dec 2019, FV?

PV = $1,000
i1 = 5%
i2 = 8%
i3 = -4%
n = 3 years

a) What is the Total Return rate, TR?

Total Return for 3 years:

1+TR = (1+i1)(1+i2)(1+i3)

1+TR = (1+5%)(1+8%)(1-4%)

1+TR = (1.05)(1+08)(0.96)

1+TR = 1.08864

TR     = 0.08864 = 8.864%

b) What is the Average Total Return, ATR?

ATR = TR/n

ATR = 8.864%/3

ATR = 2.955%

c) What is the Annualized Return rate, i?

(1+i)^3 = (1+i1)(1+i2)(1+i3)

(1+i)^3 = (1+5%)(1+8%)(1-4%)

(1+i)^3 = (1.05)(1+08)(0.96)

(1+i)^3 = 1.08864

(1+i)     = Root 3 of 1.08864

(1+i)     = 1.028714

i            = 0.028714

i            = 2.8714%

Note: Annualized Return is not the same Average Total Return. 

There are many who confuse between ATR and AR.

d) What is the Investment Value after 3 years on 31 Dec 2019, FV?

At the end of the investment period, you want to know what is the $ value you have.

You can get the Future Value, FV from any one of the formulas below:

FV = PV(1 + i)^n
FV = PV((1+i1)(1+i2)(1+i3)…(1+in))

FV = PV(1 + TR)

Formula 1:

FV = PV(1+i)^n

FV = 1000(1+2.8714%)^3

FV = 1000(1.028714)^3

FV = 1000(1.08864)

FV = 1088.64

Formula 2:

FV = PV(1+i1)(1+i2)(1+i3)

FV = 1000(1+5%)(1+8%)(1-4%)

FV = 1000(1.05)(1+08)(0.96)

FV = 1000(1.08864)

FV = 1088.64

Formula 3:

FV = PV(1 + TR)

FV = 1000(1+8.864%)

FV = 1000(1.08864)

FV = 1088.64

Hope the formula and calculation example above helps you to understand the relationships between the different returns terms used in investment.

For more explanation, go to these links:

179) Unit Price and Number of Units Growth Rates Effect on Investment Values.

https://highlevelrules.blogspot.com/2018/06/unit-price-and-number-of-units-effect.html

209) Expanded Formula for Investment

https://highlevelrules.blogspot.com/2018/09/expanded-formula-for-invesment.html

250) Distribution Yield vs Total Return

250) Distribution Yield vs Total Return

Have you wondered what are the differences between Distribution yield and Fund Performance?

There had been many confusion between Distribution Yield and Fund Performance. Both percentages are available in fund reports and that creates more confusion to those who are not aware of the differences.

Let us start with a simple case study.
Assume no charges for simplicity.

15 Jan 2019 unit price = $1.05
15 Jun 2019 unit price = $0.80
30 & 31 Dec 2019 unit price = $1.00
1 Jan 2020 unit price = $1.00

Adam invested $1,000 on 15 Jan at $1.05 per unit and has 952.38 units.
Bill invested $1,000 on 15 Jun at $0.80 per unit and has 1,250 units.
Charles invested $1,000 on 30 Dec (before distribution) at $1.00 per unit and has 1,000 units.

On 31 Dec, the fund price per unit is $1.00.
The fund declared distribution of $0.10 per unit.

Distribution yield
= Distribution amount / Unit Price after distribution
= 0.10/(1.00-0.10)
= 0.10/0.90
= 11.11%

Now, let's look at what the investors will receive as their distribution payout.
Distribution = $0.10 per unit.

Adam: 952.38 units x $0.10 = $95.24
Bill: 1,250 units x $0.10 = $125
Charles: 1,000 units x $0.10 = $100

What is the return from the distribution?
Return from Distribution = distribution payout/Investment

Adam: $95.24/$1,000 = 9.52%
Bill: $125/$1,000 = 12.5%
Charles: $100/$1,000 = 10%

What about the remaining Asset Value of the investors in their funds?
After distribution, the unit price is $1.00 - $0.10 = $0.90

Adam: 952.38 units x $0.90 = $857.14
Bill: 1,250 units x $0.90 = $1125
Charles: 1,000 units x $0.90 = $900

What are the investors' investment Total returns?
Total Return = (End Value - Begin Value + Distribution)/Begin Value

Adam: ($857.14 - $1,000 + $95.24)/$1,000 = -4.76%
Bill: ($1,125 - $1,000 + $125)/$1,000 = 25%
Charles: ($900 - $1,000 + $100)/$1,000 = 0%

This is to show that the distribution yield is at 11.1% for all investors.
However, only Bill made positive returns because he invested when the unit price was lower.
Even though Adam received distribution, he still lost 4.76%.

What if all reinvested their distributions?
All will have extra units in their investment.

Adam: $95.24/$0.90 = 105.82 units
Bill: $125/$0.90 = 138.89 units
Charles: $100/$0.90 = 111.11 units

New Total units
Adam: 952.38 + 105.82 = 1,058.20 units
Bill: 1,250 + 138.89 = 1388.89 units
Charles: 1,000 + 111.11 = 1,111.11 units

What if another investor, Darren, invested $1000 on 1 Jan 2020 (after distribution).
How many units will he gets?

Darren: $1,000/$0.90 = 1,111.11 units

Therefore, there is no difference between Charles (invested before distribution) and Darren (invested after distribution). Both will have 1,111.11 units each.

Below is the Summary in a Table format.

For more information, please consult your Unit Trust Consultant.

226) No Distribution? Did the Fund Make Money?

https://highlevelrules.blogspot.com/2019/06/226-no-distribution-did-fund-make-money.html

Click the link below to know the differences between Dividend vs Distribution.
http://highlevelrules.blogspot.com/2017/11/dividend-vs-distribution.html

Click the link below to know the Benefits of Distribution.
http://highlevelrules.blogspot.com/2017/11/benefits-of-distribution-in-unit-trusts.html

249) Why Financial Planning Approach for Retirement?

249) Why Financial Planning Approach for Retirement?

Many people will want to plan well for their retirement. However, not many plan well.
When they were asked how much is needed at retirement age, most people do not know the amount required.

Some will just say $1 Million will be enough. Some will say $2 Million will be enough.
It is mostly based on gut feel or just guess a number to give the impression that they know about it.
If they were asked how they get the number, most will just smile or laugh to avoid giving the answer.

As a quiz, what is the required amount for this case below?

30 years old now.
Retire at 60 years old.
Spends $2,000 per month.
Prepare for 20 years living expenses.
Inflation is at 4%.

How much:
a) Retirement money needed at age 60?
b) To save or invest monthly to achieve that number?

Estimate your answers before reading further.




Do you have the answers?

From our simple calculation, you will need $1,556,840 at age 60 to sustain till age 80. With a 7% investment yearly return, you will need to invest $1,373 monthly.

Most people will be surprised that the Retirement Amount and Monthly investment number are  higher than they expected.

If you do not calculate and plan, you may not be able to retire comfortably as you wanted. If your retirement fund is not sufficient, you cannot retire.

The younger persons will have a higher amount required than expected.

Why?

Because younger people have less experience in paying for all the things. If you are staying with your parents or renting, your payments are much less. Younger people do not know how much to pay for the family expenses, especially when kids expenses are included.

A higher inflation rate will definitely increase the expenses at much higher amount than you expected. Many people also expect their investments are going to give a higher return than actual.

A longer time to retire will also affect the retirement amount more. Any small change will be compounded to a longer period.

A more detail planning will be needed to check what is your actual monthly expenses?
Do you know how much is your current expenses? Most people will also estimate a number again. Have you actually list down the things you paid? Do it as a good exercise to know where actually has your money flowed out to.

Most expenses are only daily and monthly basis like food, petrol, car loan, phone, internet, water, electricity, car park, eating out, entertainment, clothing, etc.

Do take note that some expenses are based on yearly or irregular payments. For example, car insurance, road tax, life insurance, quit rents, festival expenses, car repair, etc.

The calculations are not only to be done once and use it until your retirement. You have to review your expenses situation and recalculate your retirement number again. It is best if you can do it on a yearly basis. You will be able to adjust and take some steps to handle the situation.

All the information you compiled now are just an estimate as your situation will change. You may have higher expenses, other unforeseen expenses, new income source, good investment opportunities, etc.

When your income increases, you will definitely increase your expenses too. You will have the urge to upgrade your car, house, lifestyle, etc.

This article is just a short introduction to plan for your retirement.

Please contact and discuss with your Financial Consultant on the financial options available for you.


Do you know your retirement amount required?
To calculate more accurately, click on the link below:

248) How to Calculate for Retirement Planning

http://highlevelrules.blogspot.com/2020/04/248-how-to-calculate-for-retirement.html

Here is an Excel file where you can compare the Cash Flow (income and expenses) during working and during retirement.  Link to Cash Flow excel file:

https://drive.google.com/open?id=1c9m6z1g_WxOmxHDhaM7wQLsjqSuuy21P

For more related articles:

107) Invest & Expenses for Retirement Plan

http://highlevelrules.blogspot.com/2017/09/invest-expenses-for-retirement-plan.html

210) Do You spend more or less during retirement?

http://highlevelrules.blogspot.com/2018/09/do-you-spend-more-or-less-during.html

200) Why Retirees Should Still Invest their Retirement Fund?

http://highlevelrules.blogspot.com/2018/08/invest-out-of-retirement-fund.html

201) Why You Should Start Your Retirement Fund Early?

http://highlevelrules.blogspot.com/2018/08/start-your-retirement-fund-early.html

166) Project Lower Investment Return

http://highlevelrules.blogspot.com/2018/04/project-lower-investment-return.html

248) How to Calculate for Retirement Planning

248) How to Calculate for Retirement Planning

Have you wondered how to calculate for your retirement nest egg amount?
What is the amount needed at your retirement day to spend during your retirement days.

The calculation uses the concept and formula as shown below. The value of money is worth more in the future due to interest or inflation rates. Higher interest rate and more years will make the money value increased more in the future.

These are simple steps to calculate your Monthly Savings to achieve your Retirement target.
We will be using a Time Value of Money calculator or simply named Financial Calculator.
There are many apps available online.

The example below are using screenshots from the app Financial Calculators, created by Bishinews www.fncalculator.com

Please download and start the App to follow the steps.  Click on the TVM Calculator function and you should see the TVM calculator screen as shown on below right image.

Let's take a case study of Adam.
He is currently 30 years old.
He plans to retire at 60 years old.
He wants to prepare money to live for 20 years until he is 80 years old.
He spends $24,000 per year now and wish to have same purchasing power when he is in retirement.

Assumption:
Inflation is at 4% and remains the same all the time.
During retirement, Inflation Rate is same as Investment Return Rate at 4%
He expects his current investment to give 7% per year until he retires at 60. 


There are 3 steps in the calculation.

1) Future Value of Expenses.

2) Total Expenses during Retirement.

3) Yearly Investment amount.

Step 1: Calculate Future Value of Expenses

Present Value is $24,000
Annual Rate is 4%
Period is 30 years

Click on FV button to get the Future Value.

The $24,000 expenses will be inflated to $77,842.54 after 30 years at inflation rate of 4% per annum.

Note:
1) The negative sign shows the money you get back after 30 years. It is not relevant for this calculation.
2) End mode or Begin mode gives same answer.
3) Use Annual Compounding as the Rate is Annual Compounding Rate

The app screen should look like below:

Step 2: Total Expenses during Retirement.

The $77,854.54 is only expenses for 1 year. To live for 20 years, the amount need to multiply by 20.
1 year = $77,842.54
Total = $77,842.54 x 20 years = $1,556,840

Amount needed at age 60 for 20 years Retirement = $1,556,840.

He will withdraw $77,842.54 at age 60 to spend while investing the remaining amount with a conservative return rate of 4%. 

At age 61, he will withdraw more money to match the inflation rate.

Withdrawal at age 61 = $77,842.54 (1 + 4%) = $80,956.24

He continues to withdraw additional 4% every year until he is 80 years old. Upon reaching 80 years old, all the money will be finished.

Step 3: Yearly Investment amount.

Now we need to calculate the yearly investment amount needed to achieve the Retirement Nest Egg amount. 

Future Value is $1,556,840 for the total retirement amount
Annual Rate for investment is 7%
Period is 30 years

Click on PMT button to get the yearly Payment Amount.
He needs to invest $16,481.34 every year or
$16,481.34/12 = $1,373.45 per month.

If we combine the graphs of the 3 steps, it will look like below:

This is the simple steps to calculate for your retirement amount.

Using the steps shown above, you can do your own calculation to suit your own retirement plans.

You can also download a FREE Android App that calculates the above numbers in 1 screen.
The app is only available in Google Play for Android devices. It is not available for Apple iPhone devices.

The App is UTC Tools by Sam Sim.

Get the App link here.
https://play.google.com/store/apps/details?id=com.highlevelrules.UTC_Calc_Tools

Below is how the icon in Google Play looks like.

Below is the Home Screen page 1 upon launching the App.
There are many functions and calculators for Financial Planning applications.

Below is the Home Screen page 2 upon launching the App.
Click on the Retirement Planning button, as highlighted in red.

Below is the Retirement Planning Screen.
Enter your Information to calculate the Retirement nest egg amount needed.

Below is the information entered as per case study above.

Once the data was entered, click on the Calculator button to display the calculated results as shown below.
There are 3 ways to achieve the required Retirement Target (Nest Egg Amount)
a) One single Lump Sum now
b) Yearly amount now until retirement age
c) Monthly amount now until retirement age

The amount is slightly different due to rounding off of the numbers.

Do contact and consult a Financial Consultant for more details and proper planning.

For more related articles:

107) Invest & Expenses for Retirement Plan
http://highlevelrules.blogspot.com/2017/09/invest-expenses-for-retirement-plan.html

210) Do You spend more or less during retirement?

http://highlevelrules.blogspot.com/2018/09/do-you-spend-more-or-less-during.html

200) Why Retirees Should Still Invest their Retirement Fund?

http://highlevelrules.blogspot.com/2018/08/invest-out-of-retirement-fund.html

201) Why You Should Start Your Retirement Fund Early?

http://highlevelrules.blogspot.com/2018/08/start-your-retirement-fund-early.html