I am 43. Got divorced recently. Lost all my savings in PF and gratuity. My NTH is approximately 2 lacs. I have 17 years to my retirement. How much should I invest each month to have a decent corpus. In my terms , any one today who has a corpus of about INR 2.5 to INR 3 Cr is decent. Likewise after 17 years what will be a decent amount ?

Ans: Based on your cash flows and assets, we have the following observations and recommendations:

Emergency Fund: It is generally recommended to maintain a cash reserve of 3-6 months of living expenses to cover unexpected financial needs.

Investments: Any excess funds beyond your emergency fund should be invested in financial instruments that are appropriate for your risk tolerance and financial goals. Your financial advisor can help you develop a diversified investment portfolio that meets your individual needs.

Investment Amount: As per the objective, you will require an amount of Rs. 2.46 crores at the age of 50 to meet both of your requirements. You can invest with a combination of both bulk & SIP. You can go ahead with putting Rs. 7 lakhs as bulk (keeping aside Rs. 3 lakhs as a contingency) and the rest amount can be catered to with a SIP of Rs. 51,000 p.m. Through this, you can have a corpus of Rs. 1 crore as bulk and a monthly income of Rs. 75,000 till the age of 75.

Reaching your financial goals can be a complex and challenging process, but a financial advisor can help you stay on track and make informed decisions along the way.

Ans: Planning for your retirement at 38 is a wise decision, and aiming for a corpus of Rs. 2 Crore demonstrates a clear vision for your financial future.

Understanding Your Goal:

To achieve a corpus of Rs. 2 Crore by retirement, several factors need consideration, including your current age, income, risk appetite, and investment horizon.

Determining Investment Required:

To calculate how much you need to invest monthly to reach your goal, we must consider factors such as expected rate of return, inflation, and investment duration.

Savings vs. Investments:

Given your monthly income of Rs. 1.3 Lakh, you could allocate a portion towards savings and investments. By investing a significant portion in mutual funds, you can potentially accelerate the growth of your retirement corpus.

Investment Strategies and Mutual Fund Suggestions:

Systematic Investment Plan (SIP): You can start a SIP in equity mutual funds with a diversified portfolio. Allocate funds to large-cap, mid-cap, and small-cap funds to spread risk and maximize returns over the long term.

Debt Funds: Alongside equity funds, consider investing in debt funds to provide stability to your portfolio. Debt funds offer steady returns and can act as a hedge against market volatility.

Balanced Funds: Balanced funds, also known as hybrid funds, invest in a mix of equity and debt instruments. They offer a balanced risk-return profile, making them suitable for investors with moderate risk tolerance.

Sectoral Funds: For investors willing to take higher risks, sectoral funds focused on specific industries can provide opportunities for significant capital appreciation. However, they come with higher volatility and should be approached with caution.

Regular Funds vs. Direct Funds:

Consider investing through a Certified Financial Planner who can provide personalized advice and assistance in selecting the right mutual funds. Regular funds offer the advantage of professional guidance and ongoing portfolio management, ensuring your investments align with your financial goals.

Calculating Monthly Investments:

To determine the monthly investment required to reach a corpus of Rs. 2 Crore by retirement, we need to consider factors such as expected rate of return and investment duration. A Certified Financial Planner can help you calculate this figure based on your specific circumstances and goals.

Final Recommendations:

Investing in mutual funds is an excellent way to build wealth for retirement, given their potential for long-term growth and diversification benefits. However, it's crucial to develop a well-rounded investment strategy tailored to your risk tolerance and financial objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Hello;

You will need a corpus of 8 Cr.

You may buy an immediate annuity from a life insurance company for your corpus which may yield you a monthly payout of 2.8 L(post tax).
A 6% annuity rate is considered. Some companies may offer higher annuity rates.

You may select option of joint annuity for life for yourself and your spouse with return of purchase price to your nominee.

Select a big life insurer with good solvency ratio and better credibility.

Best wishes;