Hi Abhishek, I am 43 years old. I have a monthly sip of 35k going on. I have started investing in mutual fund and sip from year 2013. Total mutual fund plus sip current market value is 1 core 9 lakhs . I plan to invest 35 k per month more for 7 to 8 years , when i want to leave job and do something else. Can you tell me what will be my corpus in 7 to 8 years down the line taking both current valution plus what i am going to continue investing?Also, i have another 1 corore total in other investment like Voluntary provident fund, Epf, ppf and esops from my company and pension fund . Here i do a monthly investment of around 80 k via mostly through company for tax savings. So what will be my total corpus after 7 to 8 yrs. Also, is it good for retirement considering my current monthly expense us 1 lakh.

Ans: To estimate your corpus after 7 to 8 years, let's assume an average annual return on your mutual fund SIPs at 10-12% and a similar return on your other investments.

For Mutual Funds:

Future Value of Current Investments: Using the future value formula, considering an average return of 10-12%, your current 1.09 crore can grow to approximately 2.2 - 2.5 crores in 7-8 years.
Future Value of Additional SIPs: Investing 35k per month for 7-8 years, at an average return of 10-12%, you could accumulate around 50 - 60 lakhs from SIPs alone.
For Other Investments:

Future Value of Current Investments: Assuming an average annual return of 10-12%, your current 1 crore can grow to approximately 2 - 2.4 crores.
Future Value of Additional Investments: With 80k monthly investments for 7-8 years, at an average return of 10-12%, you could accumulate around 1.5 - 1.8 crores.
Total Corpus After 7-8 Years: Combining both, your total corpus could range from 5.2 - 6.2 crores.

Retirement Planning:
Considering your monthly expense is 1 lakh, with a corpus of 5.2 - 6.2 crores, you can generate approximately 40-50k per month (assuming a 7-8% withdrawal rate) post-retirement. This should be sufficient considering your current expenses, but inflation and unforeseen expenses should also be considered.

It's advisable to consult a financial advisor for a detailed plan tailored to your needs, considering inflation, tax implications, and other factors.

Ans: It is really great to see that you have started to plan for your post-retirement life and you have accumulated ample amount till now.

If you continue in the same way with a monthly SIP of Rs. 80,000, I am convinced that you will have enough corpus to support yourself throughout retirement.

Accumulated corpus in 8 years with monthly investment of 80,000 and present value 1.09 Crore will likely be 4.12 Crores. Rate of return considered for the calculation is 12% CAGR.

Assuming that you want to maintain your current monthly expense of ₹1 lakh in retirement, it is important to factor in inflation, which will erode the value of your money over time.

Since you have other avenues as well to support your expenses, this will help to create a heftier corpus.

Recommendations:
• Invest in a mix of equity and debt mutual funds to diversify your portfolio and reduce risk.
• Rebalance your portfolio regularly to maintain your appropriate asset allocation as per your requirement.
• Consult with a financial advisor to develop a comprehensive retirement plan.

Ans: Planning Your Financial Future
As a Certified Financial Planner, I'm here to help you navigate your investment journey and plan for a secure retirement.

Current Investment Portfolio and Future Contributions

You've made commendable progress with your current mutual fund investments and SIPs, totaling Rs. 1 crore 9 lakhs. Continuing your SIP of Rs. 35,000 per month for the next 7 to 8 years adds substantial potential to your corpus.

Estimated Corpus in 7 to 8 Years

Assuming an average annual return of around 12%, your additional monthly investments of Rs. 35,000 can potentially grow to a significant amount over 7 to 8 years.

While exact projections require detailed calculations, leveraging the power of compounding through regular investments can substantially boost your overall corpus.

Total Corpus Including Other Investments

In addition to your mutual fund investments, you have approximately Rs. 1 crore invested in other avenues like Voluntary Provident Fund, EPF, PPF, ESOPs, and pension funds.

Factoring in the growth potential of these investments along with your mutual funds, your total corpus after 7 to 8 years could be substantial.
Evaluation of Retirement Readiness

Considering your current monthly expenses of Rs. 1 lakh, it's essential to assess whether your projected corpus would adequately support your retirement lifestyle.

Based on your anticipated corpus after 7 to 8 years and your monthly expenses, you seem to be on track for a comfortable retirement. However, it's crucial to periodically reassess your financial plan to ensure alignment with your retirement goals.
Final Thoughts

Your proactive approach towards savings and investments is commendable. By continuing your disciplined approach to investing and periodically reviewing your financial plan, you're setting yourself up for a financially secure retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: You are on the right track Subho. Longevity has increased. Post-retirement risk free interest rate has come down. Inflation has gone up.

So when planning for retirement corpus, back-of-the-envelope calculations won't work. You need to project your financial life from now to retirement and retirement to life expectancy. If it is not possible for you to do that, then approach a financial planner who will be able to create a financial roadmap.