Am I on the right track to save 2 Crore for retirement?

Ans: Your disciplined monthly investment of Rs. 60,000 is praiseworthy. Let’s evaluate your portfolio, goal alignment, and fund selection comprehensively.

Reviewing Your Goal of Rs. 2 Crore for Retirement
Saving Rs. 2 crore at 34 years is a prudent goal.

Long-term investing in mutual funds can help achieve this target.

Your monthly SIPs already reflect consistent financial planning.

Portfolio Overview
Mirae Asset ELSS Fund – Rs. 20,000
Advantages: ELSS funds offer tax-saving benefits under Section 80C.

Performance: Typically strong long-term performance due to diversified large-cap and mid-cap exposure.

Suitability: Good for long-term wealth creation while reducing taxable income.

Insight: Continue if tax-saving is a priority; else, consider reallocating to non-tax-saving funds.

Parag Parikh Flexi Cap Fund – Rs. 20,000
Advantages: Globally diversified and invests across market caps.

Performance: Consistent long-term returns with relatively lower volatility.

Suitability: Aligns well with your retirement goal due to flexibility and global exposure.

Insight: Suitable for steady long-term wealth accumulation.

Quant Active Fund – Rs. 20,000
Advantages: Focuses on active, high-conviction stock picking.

Performance: High growth potential but with greater volatility.

Suitability: Adds aggressive growth potential to your portfolio.

Insight: Retain for higher returns if you can tolerate short-term fluctuations.

Strengths of Your Current Portfolio
Diversification: Good mix of tax-saving (ELSS), global diversification, and active management.

Growth Potential: Suitable allocation for long-term wealth creation.

Goal Alignment: Investments align with your Rs. 2 crore retirement goal.

Consistency: Rs. 60,000 monthly SIP reflects disciplined investing.

Improvements for Better Portfolio Optimisation
Address Overlap
Review funds to ensure minimal overlap in stock holdings.

Excessive overlap can reduce diversification benefits.

Evaluate Risk-Reward
Quant Active Fund carries higher risk.

Consider capping exposure to aggressive funds at 25%-30% of the portfolio.

Tax Efficiency
ELSS locks in investments for 3 years.

If tax-saving is not a priority, explore other diversified equity funds.

Consider Adding a Mid-Cap Fund
Mid-cap funds provide a good balance of risk and reward.

They complement large-cap and flexi-cap investments.

Monitoring and Rebalancing
Regular Reviews
Review your portfolio annually to assess performance and alignment with goals.

Replace underperforming funds with better alternatives, if necessary.

Rebalancing
Adjust fund allocation if your risk tolerance or goals change.

Maintain equity exposure at 80%-85% for long-term growth.

Taxation Insights
Equity Mutual Funds
LTCG above Rs. 1.25 lakh is taxed at 12.5%.

STCG is taxed at 20%.

Tax Planning
Use tax benefits from ELSS funds wisely.

Avoid selling investments unnecessarily to minimise tax outflows.

Final Insights
Your portfolio is well-constructed for achieving your retirement goal. Focus on periodic reviews, minimal overlap, and risk adjustment for optimal results. Adding a mid-cap fund can enhance growth potential further. Continue disciplined SIPs to secure your financial future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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