I am 48 yrs ,i am doing 50000 SIP from this April 2022, last year increase with 25000 & from this april 150000 Sip my curent corpus aprox 25 lakh ,i wants retire at 60 n my requirement is 10 cr pls suggest should i add more or this amount will sufficient

Ans: There are too many funds; restrict yourself to 4 to 6 funds at the most.

 

Ans: Thank you for sharing your detailed financial journey and future goals. You've made impressive strides in your investments, and your dedication is commendable. Let’s analyze your current situation and provide a pathway to achieving your financial goals.

Current Financial Situation
1. Investment History
You have been investing in SIPs for 13 years, starting with Rs. 5,000 and increasing your SIP amount by Rs. 5,000 every alternate year. Currently, you are investing Rs. 50,000 per month.

2. Portfolio Value
Your portfolio value has grown to Rs. 1.3 crores with an XIRR of around 19% since 2010. This is a strong return on investment.

Financial Goals
1. Higher Education and Marriage for Daughters
You need Rs. 3-4 crores for the higher education and marriage of your two daughters, aged 15 and 5.

2. Retirement Corpus
You aim to accumulate Rs. 5 crores for your retirement by age 60. Although you plan to continue earning Rs. 3-4 lakhs per month post-retirement, having a substantial retirement corpus will provide financial security.

Projecting Future Growth
1. Assumptions
Current SIP Amount: Rs. 50,000 per month
Annual Increase in SIP: Assuming you continue to increase by Rs. 5,000 every alternate year
Expected Return: Continuing with a conservative estimate of 12% annual return on mutual funds (though your XIRR is higher)
Investment Horizon: 13 more years until retirement at age 60
2. Projected Corpus Calculation
Using these assumptions, let’s project the potential growth of your investments. Over the next 13 years, with continued SIP increases and a reasonable rate of return, your corpus can grow significantly.

Meeting Financial Goals
1. Higher Education and Marriage Costs
You need Rs. 3-4 crores for your daughters' higher education and marriage. By allocating part of your current and future investments specifically for these goals, you can ensure you meet these needs.

2. Retirement Corpus
Aiming for Rs. 5 crores for retirement, considering your current portfolio and future contributions, seems achievable. However, ensuring you increase your SIP amounts periodically and maintain a diversified portfolio is crucial.

Recommendations for Optimization
1. Increase SIP Contributions
Given your current financial capacity and goals, consider increasing your SIP amount more frequently or by a higher amount. Instead of Rs. 5,000 every alternate year, increasing annually or by a larger amount could help.

2. Review and Rebalance Portfolio
Regularly review and rebalance your portfolio to ensure it remains aligned with your financial goals. Replace underperforming funds with better-performing ones.

3. Focus on Quality Funds
Ensure that your investments are in high-quality mutual funds with a consistent track record. Avoid overlapping and concentrate on diversified and well-managed funds.

4. Emergency Fund and Insurance
Ensure you have an adequate emergency fund and sufficient insurance coverage. This provides financial security and protects your investments from unexpected events.

Consulting a Certified Financial Planner
1. Personalized Advice
A Certified Financial Planner (CFP) can provide personalized advice based on your unique financial situation, goals, and risk tolerance. This tailored approach can optimize your investment strategy.

2. Expert Management
A CFP continuously monitors your investments and makes necessary adjustments based on market conditions. This ensures your portfolio stays on track to meet your financial goals.

3. Risk Management
A CFP employs strategies to manage risk and optimize returns, helping you navigate market volatility and safeguard your investments.

Final Thoughts
You are on a strong path with your disciplined investment approach and impressive returns. To ensure you achieve your goals of Rs. 3-4 crores for your daughters' higher education and marriage, and Rs. 5 crores for your retirement, consider increasing your SIP contributions more aggressively and regularly reviewing your portfolio.

Consulting with a Certified Financial Planner can provide you with personalized advice and expert management to keep your investments on track. Your continued commitment to disciplined investing and strategic planning will help you achieve your financial aspirations.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

Ans: To achieve a retirement corpus of 10 crores by the age of 60 through SIPs, you need to determine the additional amount you need to invest monthly. Here's a simplified approach:

Calculate the time left until retirement: You have 12 years until you turn 60.
Estimate the future value of your current SIP investments: Use an SIP calculator with your current SIP amount and expected rate of return to estimate the corpus you'll have at retirement.
Determine the shortfall: Subtract the estimated corpus from your current SIP investments from the desired 10 crore corpus.
Calculate the additional SIP amount needed: Divide the shortfall by the remaining number of months until retirement (12 years x 12 months/year).
Adjust for inflation and revisit periodically: Consider inflation and revisit your plan periodically to ensure you're on track.
Consulting a Certified Financial Planner can provide a more accurate calculation tailored to your specific circumstances, considering factors like inflation, investment returns, and any changes in your financial situation. They can also provide guidance on optimizing your investment strategy to achieve your retirement goals.

Ans: Your commitment to SIPs reflects a proactive approach towards building wealth for your retirement, and your choice of funds demonstrates a well-diversified portfolio. Let's evaluate your current strategy and suggest potential adjustments to align with your ambitious goal of accumulating over 25 crores in the next 9-10 years.

Assessing Current Portfolio Allocation
Your current SIP allocation comprises investments in ICICI Pru Index, Parag Parikh Flexicap, and Nippon India Small Cap funds, each with varying risk profiles and growth potential. While index funds offer stability, flexicap funds provide diversification, and small-cap funds aim for higher growth.

Considering Risk and Return Profile
Given your age of 46 and the relatively short investment horizon until retirement, it's crucial to strike a balance between risk and return. As you approach retirement, preserving capital becomes paramount, necessitating a gradual shift towards more conservative investments.

Potential Adjustments and Additions
Diversification: Consider diversifying further by adding exposure to other asset classes like debt or balanced funds to mitigate overall portfolio risk. Debt funds provide stability, while balanced funds offer a mix of equity and debt, suitable for investors nearing retirement.

Focus on Consistency: Evaluate the historical performance and consistency of the funds in your portfolio. Ensure that they align with your long-term financial goals and risk tolerance.

Review Fund Selection: While your current funds have their merits, periodically review their performance and make adjustments if necessary. Funds experiencing consistent underperformance or significant changes in fund management may warrant reconsideration.

Professional Guidance: Engage with a Certified Financial Planner (CFP) to conduct a comprehensive review of your portfolio and provide personalized recommendations tailored to your financial objectives and risk appetite.

Conclusion
In pursuit of your ambitious goal of accumulating over 25 crores by retirement, it's essential to periodically review and adjust your investment strategy. By diversifying appropriately, focusing on consistency, and seeking professional guidance, you can optimize your SIP portfolio for long-term wealth creation and financial security in retirement.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in