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Can I retire at 45 with a monthly income of 3 lakhs?

Milind

Milind Vadjikar  |865 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Jan 08, 2025

Milind Vadjikar is an independent MF distributor registered with Association of Mutual Funds in India (AMFI) and a retirement financial planning advisor registered with Pension Fund Regulatory and Development Authority (PFRDA).
He has a mechanical engineering degree from Government Engineering College, Sambhajinagar, and an MBA in international business from the Symbiosis Institute of Business Management, Pune.
With over 16 years of experience in stock investments, and over six year experience in investment guidance and support, he believes that balanced asset allocation and goal-focused disciplined investing is the key to achieving investor goals.... more
niraj Question by niraj on Jan 08, 2025Hindi
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i am 30 years and want to retire at 45 with 3 lakhs monthly income.my present mf corpus is 40 lakhs and xirr 13%. how much should be the corpus and for that how much monthly investment in mfs.??till 45 years of age.

Ans: Hello;

Current MF corpus(40 L) may grow into 2.19 Cr after 15 years.

You need a sum of 10.5 Cr to generate post-tax monthly income of 3 L.

So for generating balance corpus of 8.31 Cr you may start a flat monthly sip of 1.55 L or begin with a monthly sip of 1 L with 10% step up every year for 15 years.

12% modest return is assumed from a combination of pure equity mutual funds.

A 4% SWP from the corpus(10.5 Cr) invested in equity savings fund with low to moderate risk rating would be apt to generate desired monthly income after tax.

Happy Investing;
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  |7545 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 06, 2025

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how much MF corpus ,which is giving 15% xirr ,is needed to have retirement monthly expanses of two lakhs.for rest of life. I am 63 now.
Ans: At age 63, planning for Rs. 2 lakhs in monthly expenses requires precision. Your financial strategy must ensure stability, longevity, and tax efficiency. Here's a comprehensive analysis:

 

Factors to Consider
1. Inflation Impact

Monthly expenses will grow with inflation over the years.
At 5% inflation, Rs. 2 lakhs today may double in 15 years.
Your corpus must cover these increasing costs.
 

2. Life Expectancy

Assume 85-90 years as life expectancy.
Plan for 25-30 years of sustained withdrawals.
 

3. Withdrawal Strategy

A 15% XIRR is achievable with the right mutual funds.
Systematic withdrawals allow funds to grow even during retirement.
 

4. Investment Mix

Balanced portfolios reduce risk while providing growth.
Focus on equity for growth and debt for stability.
 

Estimating the Corpus Needed
1. Corpus Estimation for Rs. 2 Lakhs/Month

Annual expenses are Rs. 24 lakhs in the first year.
At 15% XIRR, your corpus must sustain withdrawals and inflation.
You may need Rs. 3.5 crore to Rs. 4 crore for Rs. 2 lakhs monthly expenses.
 

2. Accounting for Inflation

Adjust for higher withdrawals every year.
An initial corpus closer to Rs. 4 crore provides a better safety margin.
 

Building and Maintaining the Corpus
1. Diversified Mutual Fund Portfolio

Invest in actively managed equity mutual funds for higher returns.
Avoid index funds due to their inability to outperform during market volatility.
Include hybrid funds for balance and debt funds for liquidity.
 

2. Regular Funds over Direct Funds

Investing through a Certified Financial Planner ensures guidance and regular monitoring.
Regular funds provide professional support and better portfolio adjustments.
Direct funds lack advisory support, which may hinder long-term goals.
 

3. Strategic Withdrawals

Use systematic withdrawal plans (SWPs) for predictable cash flows.
Withdraw from debt funds first during market downturns.
Let equity investments grow for the long term.
 

Tax Planning for Mutual Fund Withdrawals
1. Equity Fund Taxation

Long-term capital gains above Rs. 1.25 lakhs are taxed at 12.5%.
Short-term gains attract 20% tax. Plan withdrawals carefully.
 

2. Debt Fund Taxation

Capital gains are taxed as per your income slab.
Keep withdrawals within the lower tax bracket to optimise savings.
 

Risk Management and Emergency Corpus
1. Emergency Corpus

Keep Rs. 10-15 lakhs in fixed deposits or liquid funds.
This covers 6-9 months of expenses without impacting investments.
 

2. Health Insurance

Increase health insurance coverage to avoid medical emergencies impacting your corpus.
Consider policies with comprehensive benefits and high sum assured.
 

Final Insights
A well-structured corpus of Rs. 3.5 crore to Rs. 4 crore can sustain Rs. 2 lakh monthly expenses. A diversified mutual fund portfolio, strategic withdrawals, and tax-efficient planning are essential. Regular monitoring and professional advice ensure peace of mind during retirement.

 

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

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Ravi

Ravi Mittal  |505 Answers  |Ask -

Dating, Relationships Expert - Answered on Jan 16, 2025

Asked by Anonymous - Jan 16, 2025Hindi
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I am 31 years old and have been married for 6 years. My relatives keep pressuring me and scaring me, saying that I haven’t had a child yet and that I should have one now. However, we are not financially prepared at the moment. We have just bought a house, and the loans have recently started, which exhausted all our savings for the down payment. My husband’s family had a very weak financial background. They had nothing, and he struggled a lot, even living in someone else’s house to complete his education. Only he knows how hard it was. Now, his salary has improved, and I am also employed. Additionally, we are entirely responsible for my in-laws, as my husband’s elder brother neither got married nor provides any support for the parents. We are under a lot of pressure right now, but everyone just keeps asking us when we are going to have a child. I’ve seen how my husband struggled with limited finances when the family was financially weak, and I don’t want to show such hardships to our children. On top of that, I am overweight and focused on losing weight to ensure I can be healthy. I feel very stressed and confused, but my husband is fully supportive of me.
Ans: Dear Anonymous,
First of all, I am really glad that you are being so responsible and practical, rather than making such life-changing decisions based on emotions alone. Second, don't worry about other's opinions; they might have your best interest at heart, but this should be solely your decision. You should have a child only when you are ready to have one- both mentally, physically, and financially. And no hard and fast rule says you should have a child within a certain year of your marriage. Two people in a marriage is a whole family too; a child can add to the joy if that is what you want. But if not, your family is still complete. Please remember that.

Take care of your health and your mind. If you are worried about your age, you can always go see a doctor and see how many years you can delay this. Rushing is never a good idea.

Best Wishes.

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Radheshyam

Radheshyam Zanwar  |1144 Answers  |Ask -

MHT-CET, IIT-JEE, NEET-UG Expert - Answered on Jan 16, 2025

Asked by Anonymous - Jan 16, 2025Hindi
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Career
I'm a bsc botany graduate and now got admission and doing msc. I'm in first year and just gave my 1st semester exam but somehow now i feel i can't do botany at all its not just in my interest. I can't continue further with it as i dont think there's much scope too. I have interest in fields like geography or law related subjects. I'll be attempting for upsc too this year and also had a second thought to go for Law. Should i drop the msc? ....I've cried a lot thinking about that and its affecting my mental health too.
Ans: Hello dear.
First I would like to suggest that, in any way, you first complete your M.Sc. (Botnay) either with interest or without interest. Who told you that there is less scope in Botany? There are a lot of career options after M.Sc. (Botany).It is good that you are interested in geography and are attempting UPSC this year. Dear, along with your M.Sc. you can easily appear for UPSC and do the study of Geography, after completing your M.Sc. you can take the admission to Law course. Many people do the law even after their retirement or in due course of their service. There is no need to cry about the things which happened to you.
Suggestions: (1) Completer M.Sc. (Botany) by any means (2) Space-time to read Geography and UPSC Syllabus (3) Develop your overall personality and try to engage in some extracurricular activities of your interest.
Best of luck for your upcoming bright future.

If satisfied, please like and follow me.
If dissatisfied with the reply, please ask again without hesitation.
Thanks.

Radheshyam

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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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