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27-Year-Old Earning 32k/Month: How Much to Save for Retirement at 50?

Ramalingam

Ramalingam Kalirajan  |8284 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 27, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - Jul 16, 2024Hindi
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I am 27 years old man. My salary is around 32k per month. I have started SIP of 6K in 2022 jan. I have also taken team insurance and health insurance for which i have to give 25k per year for 15 years. I have no loan or anything. I want to retire at the age of 50. Please suggest me how much amount is sufficient.

Ans: Current Situation
Age: 27 years
Monthly Salary: Rs. 32,000
SIP: Rs. 6,000 per month (started in January 2022)
Insurance: Rs. 25,000 per year for term and health insurance
Loans: None
Retirement Goal: Age 50
Estimating Retirement Corpus
Assessing Future Expenses
Current Monthly Expenses: Estimate your current monthly expenses. This will help project future needs.

Inflation Adjustment: Account for inflation. Assuming a 6% annual inflation rate, your expenses will increase significantly over time.

Retirement Duration: Estimate the number of years you will need your retirement corpus. If you retire at 50 and live until 80, you need 30 years of support.

Investment Strategy
Systematic Investment Plan (SIP)
Increase SIP Contributions: Gradually increase your SIP amount as your salary increases. This will boost your retirement corpus.

Diversified Funds: Invest in a mix of large-cap, mid-cap, and small-cap funds. This balances growth potential and risk.

Public Provident Fund (PPF)
Stable Returns: Consider opening a PPF account. It offers stable, tax-free returns and helps in building a secure retirement corpus.

Regular Contributions: Aim to contribute the maximum permissible amount each year (Rs. 1.5 lakhs).

National Pension System (NPS)
Additional Security: Invest in NPS for additional retirement savings. It provides a mix of equity and debt exposure with tax benefits.
Emergency Fund
Liquidity: Maintain an emergency fund covering at least 6 months of expenses. This ensures you don't dip into retirement savings for emergencies.
Insurance
Term Insurance
Adequate Coverage: Ensure your term insurance coverage is sufficient to support your family in case of unforeseen events.

Review Periodically: Review and adjust your coverage as your financial situation changes.

Health Insurance
Comprehensive Coverage: Ensure your health insurance policy provides comprehensive coverage for medical expenses.

Regular Payments: Continue paying the annual premium to keep your coverage active.

Calculating Required Corpus
Estimation Without Specific Calculations
Monthly Expenses Projection: Assume your current monthly expenses are Rs. 20,000. With 6% inflation, expenses will be higher at retirement.

Retirement Corpus: To sustain Rs. 20,000 monthly expenses adjusted for 6% inflation, you need a substantial retirement corpus.

Final Insights
Start Early: You have a good start with your SIP. Continue and increase contributions as your salary grows.

Diversify Investments: Balance between equity and debt for optimal growth and stability.

Regular Reviews: Periodically review your portfolio and adjust as needed.

By following these strategies, you can build a sufficient corpus to retire comfortably at 50.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |8284 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 11, 2024

Money
HI, I am 34 year old working and my salary is 95000 Rs. and I have an personal loan which need to be paid for coming 5 Years which EMI is 11000 PM, apart from this I am having an Post office insurance of 5000PM , 3 SIPs quant small cap 5000PM, Nippon Large cap 3000PM, Motilal oswal Mid cap 5000 per month and one Max Niftly alpha50 10000 PM, I would like to get retire in age of 55 and would like to have around 3 crore at the time of retirement is above investment are sufficient.
Ans: Your goal to retire at 55 with a corpus of Rs 3 crore is achievable with a structured financial plan. Let's dive into the details and assess your current situation.

Current Financial Situation
You're 34 years old, earning Rs 95,000 per month. You have a personal loan with an EMI of Rs 11,000 for the next 5 years. Additionally, you have a Post Office Insurance policy with a premium of Rs 5,000 per month. Your investments include four SIPs:

A small-cap fund with Rs 5,000 per month.
A large-cap fund with Rs 3,000 per month.
A mid-cap fund with Rs 5,000 per month.
A focused equity fund with Rs 10,000 per month.
Genuine Compliments and Understanding
First, let me commend you for starting your investments early. It shows foresight and a disciplined approach towards your financial goals. Managing EMIs, insurance premiums, and SIPs simultaneously can be challenging, but you're on the right track. Let's enhance your strategy to ensure you meet your retirement goal of Rs 3 crore by 55.

Evaluating Your Investments
Small-Cap Funds
Small-cap funds have the potential for high returns, but they come with significant volatility. Given your investment horizon, they can be a good choice for capital appreciation. However, it's crucial to regularly review the fund's performance.

Large-Cap Funds
Large-cap funds offer stability and moderate returns. They invest in well-established companies, providing a balance to your portfolio. This is a solid choice for steady growth.

Mid-Cap Funds
Mid-cap funds strike a balance between the high growth potential of small caps and the stability of large caps. They are a good addition for diversification and growth.

Focused Equity Funds
Focused equity funds invest in a limited number of stocks. While they can deliver high returns, they also carry higher risk due to the concentrated portfolio. Regular performance review is essential.

The Importance of Regular Reviews
It's important to regularly review your investment portfolio. Financial markets are dynamic, and fund performance can change over time. Regular reviews help you stay on track and make necessary adjustments.

The Power of Compounding
One of the key advantages of mutual funds is the power of compounding. By investing regularly and staying invested over the long term, your investments can grow exponentially. Compounding allows your returns to generate more returns, significantly increasing your wealth over time.

Risk and Diversification
Investing in mutual funds comes with risks, such as market risk, credit risk, and liquidity risk. However, diversification helps mitigate these risks. By investing in different types of funds, you spread the risk across various asset classes and sectors.

Benefits of Actively Managed Funds
While index funds mimic the market index and provide average market returns, actively managed funds aim to outperform the market. Fund managers use their expertise to select stocks with high growth potential. Although they come with higher management fees, the potential for higher returns can outweigh the costs.

Disadvantages of Index Funds
Index funds, while low-cost, do not offer the potential for superior returns like actively managed funds. They simply track the market index and cannot outperform it. In volatile markets, this can be a disadvantage as they lack the flexibility to adapt to changing market conditions.

The Case Against Direct Funds
Direct funds have lower expense ratios compared to regular funds. However, investing through a Certified Financial Planner (CFP) provides valuable guidance. CFPs can help you select the right funds, monitor your investments, and make adjustments as needed. The expertise and personalized advice they offer can significantly enhance your investment strategy.

Your Retirement Goal: Rs 3 Crore
To achieve a corpus of Rs 3 crore by 55, it's crucial to maintain and possibly increase your current investments. Here's a detailed plan to help you stay on track:

Increase SIP Contributions: As your salary increases, consider increasing your SIP contributions. This will accelerate the growth of your corpus.

Diversify Your Portfolio: Continue diversifying your investments across different types of funds to spread risk and enhance returns.

Regular Performance Reviews: Conduct regular reviews of your investment portfolio. Rebalance your portfolio if necessary to align with your financial goals.

Maintain an Emergency Fund: Ensure you have an adequate emergency fund to cover unexpected expenses. This prevents you from dipping into your investments during emergencies.

Plan for Debt Repayment: Focus on repaying your personal loan within the next 5 years. Once repaid, redirect the EMI amount towards your investments.

Empathy and Encouragement
It's commendable that you are managing multiple financial commitments while planning for retirement. Financial planning requires discipline and patience, and you're doing a great job. Stay committed to your plan, and with regular reviews and adjustments, you'll achieve your retirement goal.

Final Insights
Retiring at 55 with a corpus of Rs 3 crore is achievable with your current investment strategy. By maintaining and increasing your SIP contributions, diversifying your portfolio, and conducting regular performance reviews, you can stay on track. Remember to leverage the expertise of a Certified Financial Planner for personalized advice and guidance.

Conclusion
Stay committed to your investment strategy, and keep your financial goals in mind. With discipline and regular reviews, you'll achieve your retirement goal and enjoy a financially secure future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8284 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 04, 2025

Asked by Anonymous - Jan 29, 2025Hindi
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I am currently 42. Living with wife and child. I own two flats. My current investment in PF is around 58 lacs, mutual fund 20 lacs and others 5 lacs. I started doing SIP 60K per month in mutual fund & 30k EPF. How much money I should have before I decide to retire.
Ans: You have built a strong financial base with provident fund savings, mutual fund investments, and regular SIP contributions. Your Rs 60,000 SIP and Rs 30,000 EPF contributions show strong financial discipline.

Now, let's assess how much corpus you need to retire comfortably.

Key Strengths in Your Financial Plan
Regular savings through SIPs and EPF contributions create long-term wealth.

A well-diversified portfolio across provident fund, mutual funds, and other investments.

No mention of debt, which is a great financial advantage.

Owning two flats reduces rental expenses, but they should not be seen as retirement assets.

Challenges That Need Attention
Inflation will increase expenses significantly over the next few decades.

Your flats are not liquid assets and may not provide stable cash flow.

Provident fund growth is slow, and it may not beat long-term inflation.

Your SIP contributions need regular review to align with your retirement goals.

You need a structured withdrawal strategy after retirement for sustainability.

Factors That Determine Your Retirement Corpus
1. Expected Monthly Expenses in Retirement
Your lifestyle expenses will increase with inflation over time.

Medical costs will rise, and insurance may not cover everything.

You must account for unexpected expenses, like home repairs or emergencies.

Your child’s higher education or marriage expenses should be planned separately.

2. Investment Growth and Asset Allocation
EPF offers stability but grows at a lower rate than equity.

Mutual funds provide long-term growth, but market risks exist.

Avoid index funds, as actively managed funds deliver better risk-adjusted returns.

A mix of equity and debt funds will create a sustainable retirement corpus.

Work with a Certified Financial Planner to rebalance your portfolio regularly.

3. Creating a Sustainable Retirement Income
Your investments should generate passive income after retirement.

Systematic withdrawals from mutual funds can replace salary income.

A portion of your corpus should remain in growth-oriented investments post-retirement.

Gold and real estate should be treated as backup assets, not primary income sources.

A well-structured investment plan ensures financial security for decades.

How Much Money Do You Need to Retire?
Your target corpus depends on your expected expenses in retirement.

If your current lifestyle costs Rs 1 lakh per month, it will increase with inflation.

You need enough savings to cover at least 35-40 years post-retirement.

A diversified mix of equity, debt, and liquid assets will ensure stability.

Work with a Certified Financial Planner to arrive at an exact number based on assumptions.

Optimising Your Retirement Plan
1. Increase Your SIP Contributions Over Time
Rs 60,000 SIP is good, but it should increase with income growth.

Increase SIP by at least 10% yearly to accelerate wealth creation.

Avoid direct mutual funds, as regular funds provide better guidance through CFPs.

2. Reduce Dependence on Provident Fund
EPF alone cannot fund a long retirement.

Increase equity allocation in mutual funds to build a larger corpus.

Debt instruments should be used for stability, not for growth.

3. Plan for Medical and Contingency Expenses
Health insurance is crucial, but self-funded reserves are also needed.

Create a medical emergency fund outside insurance coverage.

Long-term care planning is essential, especially after 60.

Finally
You are on the right track, but your corpus target depends on expenses.

Increase SIPs and maintain a balance between equity and debt.

Avoid index funds and direct plans, as active management offers better results.

Your flats should be seen as assets, not income sources.

Work with a Certified Financial Planner to fine-tune your retirement plan.

With consistent investments and proper asset allocation, your retirement goal is achievable.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

..Read more

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Career
Sir my daughter is doing Btech EEE at BIT Mesra Patna campus , she is securing 8 CGPA there . She is little bit upset due to poor placement there , what to do
Ans: Hello Alok.
Nothing will happen with an upset mood, and there is no point in blaming the institute at this stage. It is better to search for another path while completing the B.Tech. @ BIT Mesra. Here are a few suggestions for your daughter: (1) Start preparing for the GATE exam, which opens the doors for MTech at IITs/NITs or PSU jobs (like BHEL, NTPC, ONGC). (2) Focus on GRE and MBA (3) Join online Platforms: Coursera, NPTEL, Udemy, LinkedIn for advanced learning techniques related with EEE and CSE (4) Focus on Off-Campus Job Preparation, in which she can prepare for Aptitude, Coding, Core concepts etc (5) While in final year, create accounts on LinkedIn, Indeed, AngelList, naukri.com etc/ (5) If possible, join CDAC (Centre for Development of Advanced Computing) offer excellent 6-month PG diplomas with placement support (great ROI).(6) Talk to seniors/alumni for realistic inspiration and off-campus job guidance. (7) Consider a mock placement drive or aptitude training course in the final year.
Best of luck to your daughter for her upcoming bright future.
Follow me if you like the reply. Thanks
Radheshyam

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Nayagam P

Nayagam P P  |4453 Answers  |Ask -

Career Counsellor - Answered on Apr 23, 2025

Asked by Anonymous - Apr 23, 2025
Career
My daughter 90percentile in jee mains 2025,and puc board exam 95.6 percentage and kcet is 101 marks we are obc ncl and catgory 1 reservation can we get nit surathkal college for admission or other top 3 college in bangalore and she want to take jee advance 2025 , which branchas scope and high package
Ans: As far as KCET is concerned,? here are the some approximate expected KCET opening and closing ranks for the OBC-NCL category across four top engineering colleges in Bengaluru:?

RV College of Engineering (RVCE)
Computer Science & Engineering: Opening – 2,000 | Closing – 3,000
Electronics & Communication Engineering: Opening – 2,500 | Closing – 3,500
Electrical & Electronics Engineering: Opening – 3,000 | Closing – 4,500
Mechanical Engineering: Opening – 4,000 | Closing – 6,000
Civil Engineering: Opening – 5,000 | Closing – 7,000?

BMS College of Engineering (BMSCE)
Computer Science & Engineering: Opening – 2,500 | Closing – 4,000
Electronics & Communication Engineering: Opening – 3,000 | Closing – 5,000
Electrical & Electronics Engineering: Opening – 4,500 | Closing – 6,500
Mechanical Engineering: Opening – 6,000 | Closing – 8,000
Civil Engineering: Opening – 7,000 | Closing – 9,000?

M S Ramaiah Institute of Technology (MSRIT)
Computer Science & Engineering: Opening – 2,200 | Closing – 3,800
Electronics & Communication Engineering: Opening – 3,500 | Closing – 5,500
Electrical & Electronics Engineering: Opening – 5,000 | Closing – 7,000
Mechanical Engineering: Opening – 6,500 | Closing – 8,500
Civil Engineering: Opening – 7,500 | Closing – 9,500?

Dayananda Sagar College of Engineering (DSCE)
Computer Science & Engineering: Opening – 3,000 | Closing – 5,000
Electronics & Communication Engineering: Opening – 4,500 | Closing – 6,500
Electrical & Electronics Engineering: Opening – 6,000 | Closing – 8,000
Mechanical Engineering: Opening – 7,500 | Closing – 9,500
Civil Engineering: Opening – 8,500 | Closing – 10,500?

Note: The above ranks are indicative and based on available data for the OBC-NCL category. Every year, actual cutoffs may vary based on factors like seat availability, reservation policies, and candidate preferences.

?Regarding the chances of getting seats through JEE/JoSAA Counselling, here is, How to Predict Your Chances of Admission into NIT or IIIT or GFTI After JEE Main Results – A Step-by-Step Guide.

Providing precise admission chances for each student can be challenging. Some reputed educational websites offer ‘College Predictor’ tools where you can check possible college options based on your percentile, category, and preferences. However, for a more accurate understanding, here’s a simple yet effective 9-step method using JoSAA’s past-year opening and closing ranks. This approach gives you a fair estimate (though not 100% exact) of your admission chances based on the previous year’s data.

Step-by-Step Guide to Check Your Daughter's Admission Chances Using JoSAA Data
Step 1: Collect Your Daughter's Key Details
Before starting, note down the following details:

Her JEE Main percentile
Her category (General-Open, SC, ST, OBC-NCL, EWS, PwD categories)
Her Preferred institute types (NIT, IIIT, GFTI)
Her Preferred locations (or if you're open to any location in India)
List of at least 3 preferred academic programs (branches) as backups (instead of relying on just one option)
Step 2: Access JoSAA’s Official Opening & Closing Ranks
Go to Google and type: JoSAA Opening & Closing Ranks 2024
Click on the first search result (official JoSAA website).
You will land directly on JoSAA’s portal, where you can enter your details to check past-year cutoffs.
Step 3: Select the Round Number
JoSAA conducts five rounds of counseling.
For a safer estimate, choose Round 4, as most admissions are settled by this round.
Step 4: Choose the Institute Type
Select NIT, IIIT, or GFTI, depending on your preference.
If your daughter is open to all types of institutes, check them one by one instead of selecting all at once.
Step 5: Select the Institute Name (Based on Location)
It is recommended to check institutes one by one, based on your preferred locations.
Avoid selecting ‘ALL’ at once, as it may create confusion.
Step 6: Select her Preferred Academic Program (Branch)
Enter the branches you are interested in, one at a time, in your preferred order.
Step 7: Submit and Analyze Results
After selecting the relevant details, click the ‘SUBMIT’ button.
The system will display Opening & Closing Ranks of the selected institute and branch for different categories.
Step 8: Note Down the Opening & Closing Ranks
Maintain a notebook or diary to record the Opening & Closing Ranks for each institute and branch you are interested in.
This will serve as a quick reference during JoSAA counseling.
Step 9: Adjust Your Expectations on a Safer Side
Since Opening & Closing Ranks fluctuate slightly each year, always adjust the numbers for safety.
Example Calculation:
If the Opening & Closing Ranks for NIT Delhi | Mechanical Engineering | OPEN Category show 8622 & 26186 (for Home State), consider adjusting them to 8300 & 23000 (on a safer side).
If the Female Category rank is 34334 & 36212, adjust it to 31000 & 33000.

Follow this approach for Other State candidates and different categories.
Pro Tip: Adjust your expected rank slightly lower than the previous year's cutoffs for realistic expectations during JoSAA counseling.

Can This Method Be Used for JEE April & JEE Advanced?
Yes! You can repeat the same steps after your April JEE Main results to refine your admission possibilities.
You can also follow a similar process for JEE Advanced cutoffs when applying for IITs.

Want to Learn More About JoSAA Counseling?
If you want detailed insights on JoSAA counseling, engineering entrance exams, preparation strategies, and engineering career options, check out EduJob360’s 180+ YouTube videos on this topic!

Hope this guide helps! All the best for your daughter's admissions!

Follow RediffGURUS to Know more on 'Careers | Health | Money | Relationships'.

...Read more

Nayagam P

Nayagam P P  |4453 Answers  |Ask -

Career Counsellor - Answered on Apr 23, 2025

Asked by Anonymous - Apr 23, 2025
Career
I got 98.02%ile in JEE MAINS session 2 . (EWS) Can I get TOP NIT (CSE) ?? EWS RANK 4146
Ans: Here is, How to Predict Your Chances of Admission into NIT or IIIT or GFTI After JEE Main Results – A Step-by-Step Guide.

Providing precise admission chances for each student can be challenging. Some reputed educational websites offer ‘College Predictor’ tools where you can check possible college options based on your percentile, category, and preferences. However, for a more accurate understanding, here’s a simple yet effective 9-step method using JoSAA’s past-year opening and closing ranks. This approach gives you a fair estimate (though not 100% exact) of your admission chances based on the previous year’s data.

Step-by-Step Guide to Check Your Admission Chances Using JoSAA Data
Step 1: Collect Your Key Details
Before starting, note down the following details:

Your JEE Main percentile
Your category (General-Open, SC, ST, OBC-NCL, EWS, PwD categories)
Preferred institute types (NIT, IIIT, GFTI)
Preferred locations (or if you're open to any location in India)
List of at least 3 preferred academic programs (branches) as backups (instead of relying on just one option)
Step 2: Access JoSAA’s Official Opening & Closing Ranks
Go to Google and type: JoSAA Opening & Closing Ranks 2024
Click on the first search result (official JoSAA website).
You will land directly on JoSAA’s portal, where you can enter your details to check past-year cutoffs.
Step 3: Select the Round Number
JoSAA conducts five rounds of counseling.
For a safer estimate, choose Round 4, as most admissions are settled by this round.
Step 4: Choose the Institute Type
Select NIT, IIIT, or GFTI, depending on your preference.
If you are open to all types of institutes, check them one by one instead of selecting all at once.
Step 5: Select the Institute Name (Based on Location)
It is recommended to check institutes one by one, based on your preferred locations.
Avoid selecting ‘ALL’ at once, as it may create confusion.
Step 6: Select Your Preferred Academic Program (Branch)
Enter the branches you are interested in, one at a time, in your preferred order.
Step 7: Submit and Analyze Results
After selecting the relevant details, click the ‘SUBMIT’ button.
The system will display Opening & Closing Ranks of the selected institute and branch for different categories.
Step 8: Note Down the Opening & Closing Ranks
Maintain a notebook or diary to record the Opening & Closing Ranks for each institute and branch you are interested in.
This will serve as a quick reference during JoSAA counseling.
Step 9: Adjust Your Expectations on a Safer Side
Since Opening & Closing Ranks fluctuate slightly each year, always adjust the numbers for safety.
Example Calculation:
If the Opening & Closing Ranks for NIT Delhi | Mechanical Engineering | OPEN Category show 8622 & 26186 (for Home State), consider adjusting them to 8300 & 23000 (on a safer side).
If the Female Category rank is 34334 & 36212, adjust it to 31000 & 33000.

Follow this approach for Other State candidates and different categories.
Pro Tip: Adjust your expected rank slightly lower than the previous year's cutoffs for realistic expectations during JoSAA counseling.

Can This Method Be Used for JEE April & JEE Advanced?
Yes! You can repeat the same steps after your April JEE Main results to refine your admission possibilities.
You can also follow a similar process for JEE Advanced cutoffs when applying for IITs.

Want to Learn More About JoSAA Counseling?
If you want detailed insights on JoSAA counseling, engineering entrance exams, preparation strategies, and engineering career options, check out EduJob360’s 180+ YouTube videos on this topic!

Hope this guide helps! All the best for your admissions!

Follow RediffGURUS to Know more on 'Careers | Health | Money | Relationships'.

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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