I am 33 and I have around 6.4 Lakh Invested in Axis ELSS Tax Saver Fund,3 Lakh in SBI Long Term Equity Fund, 2.2 Lakh in SBI Bluechip Fund & 1.4 Lakh in SBI Focused Equity Fund. I am also running a 30000/- monthly SIP with almost 40% of it in Smallcap segment and 20% in Gold Fund. I have a NPS Auto Choice Account of 17 Lakh with a yearly addition of 1.2 lakh.
How much can all this generate by the time of my retirement?
Ans: You have a strong base already. You are only 33 years old. You have around 25 years to grow your wealth till retirement. Let us analyse your total investments and long-term potential from a 360-degree view.
We will assess every part of your portfolio, the risks, the growth potential, and how you can improve it step by step.
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Your Present Investments in Mutual Funds
You have invested Rs. 6.4 lakh in ELSS, Rs. 3 lakh in a long-term equity fund, Rs. 2.2 lakh in a bluechip fund, and Rs. 1.4 lakh in a focused fund.
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Your total mutual fund lumpsum investment is Rs. 13 lakh.
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These funds are mostly equity-oriented and for long-term growth.
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ELSS funds are locked for 3 years but give tax benefits under section 80C.
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Your mix of ELSS, large cap and focused funds shows good diversification.
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The focus is more towards tax saving and large cap growth.
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This is suitable for someone with a stable income and long-term view.
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But your fund mix should be reviewed every year.
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Some funds may underperform over time and need replacement.
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Active monitoring gives better results than just investing and forgetting.
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A Certified Financial Planner can help you review and restructure if needed.
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Continue tracking performance every 6 months to stay on track.
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Your Monthly SIPs and Allocation Pattern
You are running a Rs. 30,000 SIP each month.
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40% of it is in small cap funds.
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20% is in gold mutual fund.
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The rest 40% seems to be in large/multi-cap or other diversified equity funds.
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Now let us analyse this composition:
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40% in small cap is quite aggressive.
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Small caps are very volatile. They can give high returns but also deep corrections.
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Keep small cap allocation below 25% in total equity SIPs.
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You can move some SIP amount to a balanced advantage fund.
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Balanced funds give stability when markets are down.
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20% in gold mutual fund is on the higher side.
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Gold is not a compounding asset like equity.
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Over long term, gold delivers lower return than equity.
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Use gold only for 5-10% of total portfolio. Not more.
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The rest 40% in equity is fine, but needs regular review.
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Maintain SIPs in regular plans through Certified Financial Planner.
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Direct funds give no handholding or guidance when markets fall.
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Regular plans help you stay committed and balanced.
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Rebalancing SIPs every 12–18 months improves returns and reduces risk.
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Your National Pension System (NPS) Contribution
You have Rs. 17 lakh corpus in NPS Auto Choice.
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You are adding Rs. 1.2 lakh per year to NPS.
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NPS Auto Choice invests automatically in equity, debt and govt securities.
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Your allocation will shift towards debt slowly as you age.
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This reduces risk after age 45.
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NPS is a good retirement asset due to long lock-in.
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But maturity proceeds are partly taxable and partly annuity.
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So don’t depend only on NPS for retirement.
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Use mutual funds also to build tax-efficient corpus.
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NPS is a supporting vehicle, not a full retirement solution.
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How Much Can All These Generate Till Retirement?
Let us assume you invest for 25 more years.
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You will add Rs. 30,000 monthly SIPs. That’s Rs. 3.6 lakh/year.
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You will also add Rs. 1.2 lakh/year to NPS.
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Your mutual fund lumpsum of Rs. 13 lakh continues to grow.
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Based on long-term equity CAGR of 11% to 12%, your corpus will grow strongly.
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In 25 years, your MF corpus alone can become several crores.
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Your NPS corpus can also cross Rs. 1 crore to Rs. 1.5 crore.
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Final retirement wealth can range between Rs. 3.5 crore to Rs. 5 crore or more.
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This depends on SIP discipline, fund choice, rebalancing and staying invested.
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Direct fund investors often lose returns due to fear and wrong decisions.
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Regular plan investors with Certified Financial Planner stay more consistent.
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That helps in wealth creation without panic or stopping SIPs.
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Improvement Areas in Your Current Strategy
Let us now talk about areas of improvement in your plan.
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Reduce gold fund SIP to 5% or 10%. Use rest in hybrid or flexi cap funds.
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Reduce small cap SIP exposure to 25% or less. Add large and balanced funds.
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Monitor ELSS performance. Don’t hold old ELSS just for tax benefit.
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Move older ELSS units to better performing funds after 3-year lock-in.
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Use a Certified Financial Planner for fund selection and annual review.
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Avoid investing through apps that show direct funds without guidance.
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Do not fall for lowest expense ratio trap.
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Many direct funds underperform due to no tracking or correction.
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Regular plans give you peace of mind and expert handholding.
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Start tracking goals – like retirement, home, child’s education.
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SIPs done without goals often get withdrawn during market dips.
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Emergency fund must be built separately. At least 6 months of expenses.
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Do not mix emergency savings and investments.
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Taxation Awareness You Must Keep in Mind
As your investments grow, tax rules will affect your returns.
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For equity mutual funds: LTCG above Rs. 1.25 lakh/year is taxed at 12.5%.
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STCG (less than 1 year) is taxed at 20%.
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For debt funds: gains are taxed as per your slab.
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NPS maturity is partly tax-free, partly annuity and taxable.
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Gold fund redemptions are taxed as per type of asset (debt-based).
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Plan your redemptions with tax calendar in mind.
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Avoid frequent switches. It reduces compounding and increases tax.
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Rebalance with minimal taxation in mind.
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Long-Term Stability Recommendations
You are already doing great.
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But to ensure success for next 25 years, follow these:
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Stick to SIP discipline no matter what market says.
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Review SIPs every year with Certified Financial Planner.
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Don’t change funds just because of short-term performance.
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Add hybrid and flexi-cap funds to reduce ups and downs.
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Avoid investing heavily in gold for long term.
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Shift risky allocation slowly to stable funds as you near 45.
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Use NPS only as a support system for retirement.
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Track your wealth growth every year without panic.
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Focus on goals and time horizon, not only on returns.
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Build Rs. 3 crore to Rs. 5 crore corpus slowly with consistent habits.
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Compounding rewards patience. Not shortcuts.
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Finally
You are already ahead of most investors of your age. Very disciplined.
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But success is not about starting alone. Staying the course is more important.
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Avoid gold fund overuse. Reduce small cap exposure slightly.
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Add stability via hybrid and balanced equity funds.
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Don’t switch to direct plans. They seem cheaper but may cost more emotionally.
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Investing through regular plans with Certified Financial Planner is safer.
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Continue current path with corrections. Retirement will be stress-free.
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Stay consistent. Review yearly. You will reach your wealth goals peacefully.
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Best Regards,
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K. Ramalingam, MBA, CFP,
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Chief Financial Planner,
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www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Question by S on Jul 17, 2024English
