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Retirement Planning at 39: Can I Reach a 5 Crore Corpus by 50?

Ramalingam Kalirajan |6695 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 31, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Asked by Anonymous - Jul 31, 2024Hindi

Age 39 monthly income 2,00,000 Asset : Real Estate (1 flat ~ 1.2 Cr current value & 2 plots around 1 Cr) Mutual Funds - total value 15 lakhs Already Kept Emergency fund - 12 months multiplied by monthly expense Have avoided any sorts of loans Have Kept Term Insurance and Private Health Insurance As well. Am targeting a corpus of 5 Cr by age 50. My Current SIP spend is 35k per month under below plans ICICI Prudential Nifty Next 50 Index Fund - Direct Plan - Growth Kotak Small Cap Fund - Direct Plan - Growth (Erstwhile Kotak Mid-Cap) Navi Nifty 50 Index Fund - Direct Plan - Growth PGIM India Midcap Opportunities Fund - Direct Plan - Growth Tata Digital India Fund Direct Plan Growth quant Active Fund - Direct Plan quant ELSS Tax Saver Fund - Direct Plan quant Mid Cap Fund - Direct Plan Few 1 time lump sum mutual funds (unfortunately regular plan due to my relative who acted like an agent) Mirrae asset great consumer fund Tata Midcap Growth fund Mirrae Asset large and midcap fund Need help in this portfolio review if anything needs to be tweaked or any other suggestions to help reach my goal

Ans: Portfolio Overview
You have an impressive portfolio. Your assets include real estate and mutual funds. Your emergency fund is well-managed. No loans and adequate insurance add to your financial stability. You're targeting a corpus of Rs 5 crores by age 50. Let's evaluate your current investments and provide suggestions to reach your goal.

Current SIP Investments
ICICI Prudential Nifty Next 50 Index Fund - Direct Plan - Growth
Kotak Small Cap Fund - Direct Plan - Growth
Navi Nifty 50 Index Fund - Direct Plan - Growth
PGIM India Midcap Opportunities Fund - Direct Plan - Growth
Tata Digital India Fund - Direct Plan - Growth
quant Active Fund - Direct Plan
quant ELSS Tax Saver Fund - Direct Plan
quant Mid Cap Fund - Direct Plan
Current Lump Sum Investments
Mirae Asset Great Consumer Fund
Tata Midcap Growth Fund
Mirae Asset Large and Midcap Fund
Review of Index Funds
Index funds like ICICI Prudential Nifty Next 50 and Navi Nifty 50 Index Fund track market indices. They lack flexibility. Active funds can outperform by selecting better-performing stocks.

Benefits of Actively Managed Funds
Active funds, managed by experts, can adapt to market changes. They have the potential to outperform indices. Funds like Kotak Small Cap and PGIM India Midcap Opportunities are examples of well-managed active funds.

Regular Funds Over Direct Funds
Regular funds come with the benefit of professional advice. Investing through a Certified Financial Planner (CFP) can help in making informed decisions. CFPs can guide on fund selection and portfolio balancing.

Portfolio Tweaks and Suggestions
Replace Index Funds: Shift from index funds to actively managed funds for better returns. Consider funds with a consistent performance record.

Diversify Across Asset Classes: Ensure your portfolio has a good mix of equity, debt, and gold. This helps in risk management.

Review Small Cap Exposure: Small cap funds are high-risk, high-return. Ensure they align with your risk tolerance.

Increase SIP Amount: If possible, increase your SIP amount gradually. This will help in compounding your investments.

Monitor Fund Performance: Regularly review the performance of your funds. Exit underperforming funds and switch to better options.

Additional Considerations
Rebalance Your Portfolio: Periodically rebalance your portfolio to maintain the desired asset allocation.

Tax Planning: Utilize ELSS funds for tax-saving under Section 80C.

Emergency Fund: Ensure your emergency fund remains adequate as your expenses increase over time.

Final Insights
Your portfolio is robust, with a good mix of assets. Shifting from index funds to actively managed funds can enhance returns. Regularly review and rebalance your portfolio to stay on track. Increasing your SIP amount and diversifying across asset classes will also help in achieving your Rs 5 crore target by age 50.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.