Retirement planning: Where to invest to create retirement corpus of Rs 6 crore in 20 years
I am 29 and earn a monthly salary of Rs 75,000. I don’t have any investments. I aspire to retire within 20 years. How can I retire with a corpus of Rs 6 crore?
Naveen Kukreja, CO-FOUNDER AND CEO, PAISABAZAAR.COM: Consider allocating 50% of your current salary towards retirement savings and increase it 10% annually.
For a comfortable retirement, aim for a corpus of Rs 3.14 crore, requiring a monthly equity investment of Rs 31,000, or Rs 60,000 for a corpus of Rs 6 crore in 20 years. Maintain an 80:20 equity-debt mix in your post-retirement portfolio to balance risk. Start with monthly SIPs of Rs 28,000 in equity funds and Rs 7,000 in debt instruments.
With an annualised return of 12% in equities, and a 10% annual hike in SIP amount, you could amass a corpus of Rs 5.56 crore in 20 years. A 7% return in fixed income, with 10% annual hike in contribution, will create Rs 84 lakh in 20 years. Diversify equity SIPs across large-cap, flexi-cap, and multi-asset funds.
For fixed income, consider PPF for tax benefits and safety, and long duration debt funds, with a transition to ultrashort-duration funds as interest rates fall. Maintain an emergency fund equal to six months’ expenses. Secure your family’s future with a term plan that is 20 times your annual expenses.
Also buy a health cover of at least Rs 50 lakh, with a base cover of Rs 5 lakh and a super top-up of Rs 45 lakh.
I am a 66-year-old retiree and my wife will soon retire with a pension of Rs 70,000. We have a medical cover of Rs 30 lakh. We live in our own house and our monthly expenses are less than Rs 70,000. We own two other properties worth Rs 3 crore, generating a monthly rent of Rs 70,000. We have FDs of Rs 1 crore, mutual funds of Rs 1 crore and blue-chip
