I am 35 year old working professional, have an investment in residential property equivalent to 70 lakh , have monthly income post tax is around 2 lakh rupees ? How much to start investing so that if I retire at an age of 45 I have approx 1 lakh monthly income

Ans: Embarking on the journey towards a comfortable retirement at 41 reflects foresight and responsibility. To achieve a monthly income of 1 lakh post-retirement, one needs to plan meticulously, akin to nurturing a tree from a sapling to a robust entity.

Considering the compounding magic of investments, starting with a significant monthly contribution is crucial. It's like planting a tree with strong roots to bear ample fruit later. Aim to invest a substantial portion of your income, balancing between equity for growth and fixed income for stability.

Diversifying across various investment avenues is akin to planting different types of crops. Some may yield quicker returns, while others require patience. Real estate, equities, mutual funds, and bonds each play a role in shaping a balanced portfolio.

Lastly, remember that investing is not just about numbers but also about aligning your life's goals and aspirations. With consistent efforts and guidance, you're not just building wealth but crafting a future filled with security and peace of mind.

Ans: As per your query, you require Rs 1 lakh per month (today’s cost) after retirement. Considering inflation to maintain same purchasing power you would be requiring around Rs 3.20 lakh per month approximately. Thus assuming you will be retiring at 60 and life expectancy till age 75, you are required to do an SIP of Rs 57,000 (Approx) per month for 20 years with an assumed ROI of 10%.

The suggestion on investment avenues and choice of product also depends on further aspects such as risk appetite, asset allocation and cashflows etc. Thus, in overall view you can go for good combination of large, flexi, mid and some hybrid fund to construct a holistic portfolio including distinct product to reach the goal efficiently. Periodic review of investment is also crucial.

Ans: Great that you're planning for your future at 27! Let's look at your goals.
Your Financial Picture

Age: 27 years
Monthly income: Rs. 70,000
Monthly expenses: Rs. 20,000
Short-term goal: Rs. 10 lakhs in 31 years
Long-term goal: Rs. 3-4 crores by age 50

Appreciating Your Foresight

Planning for retirement at 27 is very smart
You're giving yourself time to grow your money
Balancing saving and enjoying life is important

Investment Strategy for Short-term Goal

Rs. 10 lakhs in 31 years is a modest goal
You can achieve this with small, regular investments
Consider a mix of equity and debt mutual funds

Long-term Retirement Planning

Rs. 3-4 crores by 50 needs more aggressive saving
Start with 20-25% of your income for this goal
Increase this amount as your income grows

Power of Compounding

Starting early gives your money time to grow
Even small amounts can become large over time
Stay invested for the long term

Balanced Approach to Saving

Aim to save about 30-35% of your income initially
This leaves room for current expenses and enjoyment
Adjust this as your income and expenses change

Investment Options

Mutual funds can be good for long-term growth
Choose a mix of equity and debt funds
Review and rebalance your portfolio regularly

Increasing Your Investments

Try to increase your investment amount yearly
Even a small increase can make a big difference
Use salary hikes to boost your investments

Regular Review

Check your progress every 6 months
Adjust your plan if your goals or situation change
Stay committed to your long-term objectives

Enjoying Life While Saving

Set aside some money for fun and travel
This prevents feeling deprived and helps stick to your plan
Balance is key to long-term financial success

Finally
Start with investing about Rs. 20,000-25,000 per month. Increase this as your income grows. Regular review and adjustments will help you reach your goals while enjoying life.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

Ans: You are 45 years old with a monthly income of Rs 1.5 lakh.

You own two houses, and one of them still has an ongoing loan.

You aim for a retirement corpus of Rs 3 to 4 crore.

Your remaining working years will determine how much you can invest.

Your current savings and investments (other than real estate) will impact your strategy.

Your loan repayment is a key factor in cash flow management.

Key Considerations Before Investing

The number of years left until retirement affects your investment choices.

Your monthly expenses will determine how much you can save.

The existing loan reduces your free cash flow.

If your properties are for self-use, they won’t contribute to retirement income.

Rental income, if applicable, can be factored into your plan.

You need to balance investments with loan repayment.

Loan Repayment Strategy

If the home loan has a high interest rate, consider prepaying it.

If the interest rate is low, investing instead may yield better returns.

Ensure that EMIs do not exceed 40% of your income.

A longer loan tenure means more interest paid.

A shorter tenure increases EMI but saves on interest.

How Much to Invest Monthly?

The required investment depends on your retirement age and expected returns.

If you have 15 years left, you need a higher monthly investment.

If you have existing savings, the required investment reduces.

Inflation will increase your future expenses.

A structured investment plan ensures you reach your goal.

Types of Investments to Consider

A mix of equity and debt ensures balanced growth.

Equity mutual funds offer potential for higher returns.

Debt funds provide stability and safety.

Fixed deposits can be used for emergency funds.

Gold and sovereign bonds add diversification.

A portion can be allocated to liquid funds for short-term needs.

Why Equity Mutual Funds?

They have historically given higher returns than other assets.

Long-term investments help beat inflation.

Professional fund managers handle investments efficiently.

You can start with SIPs to invest consistently.

Diversification reduces risk compared to direct stock investment.

Avoiding Common Mistakes

Avoid locking too much money in real estate.

Insurance is not an investment; avoid ULIPs or endowment plans.

Do not delay investing, as starting late requires more funds.

Keep emergency funds separate before investing.

Review your investments yearly to ensure they stay on track.

Managing Risk and Market Volatility

Markets fluctuate, but long-term investments tend to grow.

A staggered investment approach reduces risk.

Asset allocation should match your risk tolerance.

Rebalancing investments periodically ensures the right mix.

Avoid emotional decisions based on short-term market trends.

Ensuring Liquidity for Retirement

Build a liquid corpus alongside long-term investments.

Ensure part of your corpus is easily accessible post-retirement.

Plan withdrawals systematically to avoid financial stress.

Avoid over-exposure to illiquid assets like property.

A mix of short-term and long-term funds ensures cash flow.

Final Insights

Your financial plan must balance investments, loan repayment, and savings.

A disciplined approach with regular investments will help you achieve Rs 3-4 crore.

Equity mutual funds can be the primary growth driver.

Debt and fixed-income investments add stability.

Periodic review and adjustments will ensure success.

Start investing immediately to maximize your retirement corpus.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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