Hi,
I am 47 years old. I have a corpus of about 3.4Cr of which about 1.5Cr is in equities(Mostly large cap) & ETFs and rest is FD and PF. Apart from this, I have about Rs 72000 rental income. I have a term insurance and family medical insurance. I need to work for atleast another 3 years to cover my elder son's education and need a corpus for my 14 yrs old daughter's education of say about 50L. I can invest around 2L per month in SIPs. Given all this, how much more retirement corpus I need to have a regular monthly income of 2L? Thanks for replying.
Ans: It's great to see you've built a substantial corpus and are planning for your future financial needs. Let's analyze your situation and determine the steps needed to achieve your goals.
Current Financial Status
Corpus Allocation
Your corpus of ?3.4 crore, with a significant portion in equities, FDs, and PF, reflects a diversified investment approach.
Additional Income
The rental income of ?72,000 per annum provides an additional source of cash flow, contributing to your overall financial stability.
Future Financial Goals
Education Expenses
You have identified the need for ?50 lakh for your daughter's education in 14 years and have committed to investing ?2 lakh per month in SIPs to achieve this goal.
Retirement Planning
To secure a regular monthly income of ?2 lakh post-retirement, we need to calculate the additional retirement corpus required.
Retirement Corpus Calculation
Desired Monthly Income
A monthly income of ?2 lakh translates to an annual income of ?24 lakh post-retirement.
Withdrawal Rate
Assuming a conservative withdrawal rate of 5-6% from the retirement corpus, we can estimate the required corpus as follows:
?24,00,000 / 0.05 = ?4.8 crore
?24,00,000 / 0.06 = ?4 crore
Gap Analysis
Current Retirement Corpus
Your current corpus of ?3.4 crore is significant but falls short of the required retirement corpus.
Additional Savings
To bridge the gap, you may consider increasing your monthly SIP contributions or exploring other investment avenues that offer potential for higher returns.
Asset Allocation
Review your asset allocation to ensure it aligns with your risk tolerance and investment goals, especially considering the need for regular income post-retirement.
Conclusion
While you have made commendable progress towards your financial goals, there is a need to augment your retirement corpus to secure a regular monthly income of ?2 lakh post-retirement. By reassessing your investment strategy, increasing your savings rate, and exploring suitable investment options, you can work towards achieving financial independence and ensuring a comfortable retirement.
If you require further assistance or personalized advice, feel free to reach out. I'm here to support you in navigating your financial journey and achieving your objectives.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in