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Can I retire at 60 with my current savings?

Ramalingam

Ramalingam Kalirajan  |8317 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 27, 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
Sasanka Question by Sasanka on Aug 20, 2024Hindi
Money

Dear Sir, My age is 51 yrs. In a pvt co. and would like to retire at age of 60. I have MF of any 17L, EPF around 14L, PPF balance of 13L as on date. I am able to contribute the max amt of 1.5L annually in PPF, around 31K in SIP, adding 4k per year till 60, what would be my final accumulated amount in PPF and MF at age of 60? My second question is, If I have a fixed expense of 35000 at present, what would it be upto, considering the inflation, at age of 60? And, how much should I have in bank to get that sum as an interest to manage my expenses after 60? How and where should I keep my money, Pls do suggest.

Ans: You are currently 51 and plan to retire at 60. You have accumulated Rs. 17 lakh in mutual funds, Rs. 14 lakh in EPF, and Rs. 13 lakh in PPF. You are maximizing your PPF contribution at Rs. 1.5 lakh annually and investing Rs. 31,000 monthly in SIPs, planning to increase your SIP by Rs. 4,000 per year until retirement. Let’s analyze how these contributions can grow over the next nine years and how to prepare for retirement.

Estimating Your PPF Balance at Age 60
Your current PPF balance is Rs. 13 lakh, and you plan to continue contributing Rs. 1.5 lakh annually. The PPF interest rate is variable, but let’s assume an average rate of 7.1% per annum for the purpose of this estimate.

Yearly Contribution: Rs. 1.5 lakh
The compound interest on your contributions will significantly boost your PPF corpus over the next nine years. With the power of compounding, your PPF balance at age 60 could grow substantially.

Estimating Your Mutual Fund Portfolio at Age 60
You have Rs. 17 lakh in mutual funds and are contributing Rs. 31,000 per month, planning to increase your SIP by Rs. 4,000 annually. Let’s assume a conservative annual return of 12% from your mutual funds.

Current Monthly SIP: Rs. 31,000
Annual SIP Increment: Rs. 4,000
With these contributions and assumed returns, your mutual fund portfolio could grow significantly by the time you reach 60.

Inflation Impact on Your Monthly Expenses
Your current monthly expenses are Rs. 35,000. Inflation will erode the purchasing power of money over time, so it’s essential to adjust your future expenses for inflation. Let’s assume an average inflation rate of 6% per annum.

Current Monthly Expenses: Rs. 35,000
Inflation Rate: 6% per annum
By the time you reach 60, your monthly expenses will likely increase due to inflation. This increase will impact how much you need in retirement savings to maintain your current lifestyle.

Estimating the Required Corpus for Post-Retirement
To maintain your lifestyle post-retirement, you need to ensure that your retirement corpus can generate sufficient returns to cover your expenses. Given your current expenses and expected inflation, you’ll need to calculate how much corpus is required to generate a sustainable income.

Required Monthly Income at Retirement: Adjusted for inflation
Safe Withdrawal Rate: Typically 4% per annum
Based on these assumptions, you can determine the corpus needed to support your retirement expenses.

Recommended Investment Strategy
Given your current financial status and retirement goals, it’s essential to diversify your investments to manage risk while ensuring growth.

Continue with SIPs in Mutual Funds
Diversification: Invest in a mix of large-cap, mid-cap, and multi-cap funds. These funds provide growth potential while balancing risk.
Regular Monitoring: Regularly review your portfolio and make adjustments based on market conditions and your financial goals.
Maximize PPF Contributions
Tax Benefits: PPF contributions provide tax benefits under Section 80C, which reduces your taxable income.
Safe and Secure: PPF is a safe investment with a guaranteed return, making it a reliable component of your retirement plan.
Consider a Retirement-Oriented Investment Plan
Balanced Fund Allocation: As you approach retirement, consider shifting some investments to more conservative options, such as balanced or hybrid funds, which combine equity and debt.
Systematic Withdrawal Plan (SWP): Upon retirement, consider using SWPs from your mutual funds to generate a regular income while keeping the rest of your investments growing.
Final Insights
Planning for retirement involves estimating future expenses, building a sufficient corpus, and investing wisely. Given your current savings and investment strategy, you’re on the right track. However, it’s crucial to regularly review and adjust your investments to align with your goals and market conditions.

Estimate Future Expenses: Regularly revisit your expense projections and adjust for any changes in your lifestyle or inflation.
Stay Disciplined: Continue your SIPs and PPF contributions to build a solid retirement corpus.
Review Regularly: Ensure your investment portfolio remains aligned with your retirement goals, making adjustments as needed.
By following these steps, you can work towards a comfortable and financially secure retirement.

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.
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Ramalingam

Ramalingam Kalirajan  |8317 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 11, 2024

Asked by Anonymous - May 07, 2024Hindi
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I am 29 yrs old. I investing 90k per month in mutual fund and stock market valued approx 34lakh and 11 lakh respectively. I also have 100 units of SGB amd activity investing in it around 10 units per issue. Just started PPF investment this year. I need to retire by age of 45. And want 3 lakh per month for monthly expenses. Please guide am i going in right directions?
Ans: At 29, you're demonstrating a proactive approach towards securing your financial future, which is commendable. Your investments in mutual funds, stocks, Sovereign Gold Bonds (SGBs), and Public Provident Fund (PPF) reflect a diversified portfolio aimed at wealth accumulation.

Investing in mutual funds and the stock market can offer substantial growth potential over the long term, especially when approached with a disciplined strategy and a focus on quality investments. Your current portfolio values of approximately 34 lakh in mutual funds and 11 lakh in stocks indicate a significant commitment to building wealth through equities.

Sovereign Gold Bonds (SGBs) offer a unique avenue for investing in gold, providing the dual benefits of capital appreciation and fixed interest income. Your strategy of actively investing in SGBs, averaging around 10 units per issue, aligns with a long-term wealth accumulation plan.

Additionally, initiating PPF investments this year adds a layer of stability to your portfolio. PPF offers attractive tax benefits and a guaranteed rate of return, making it a suitable option for retirement planning.

However, retiring by the age of 45 and aiming for a monthly expense of 3 lakh rupees necessitates a thorough evaluation of your financial plan. While your current investments show promise, achieving your retirement goal will require careful planning and possibly adjusting your investment strategy.

As a Certified Financial Planner, I recommend the following steps:

Conduct a comprehensive financial assessment to determine your current financial position, retirement goals, and risk tolerance.
Develop a detailed retirement plan, considering factors such as inflation, lifestyle expenses, and investment returns.
Evaluate the adequacy of your current savings and investment strategy in meeting your retirement income needs.
Explore options for increasing your savings rate and optimizing your investment portfolio to maximize returns while managing risk.
Continuously monitor and adjust your financial plan as needed to stay on track towards achieving your retirement goals.
In summary, while you've made significant strides in building your investment portfolio, retiring by the age of 45 and generating a monthly income of 3 lakh rupees will require careful planning and disciplined execution. By working with a Certified Financial Planner and regularly reviewing your financial plan, you can increase the likelihood of achieving your retirement goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Milind

Milind Vadjikar  |1205 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 16, 2024

Asked by Anonymous - Oct 15, 2024Hindi
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Money
Hi, we are a family of 3 from Mumbai, me and my wife are 40 years old and 10 years old daughter. Our monthly take home salary is 4.25 lac put together. And also get yearly bonus of around 15 lac. Hopefully a 10 percent increase in next financial year. We have following investments, assets and expenses: 1. around 60 lac in MF in the form of SIP with total monthly investment of 90k in funds like PPFAS (2 SIPs 10k each in flexi cap fund,one in my name and other in my daughters name), Axis (5 SIPs of me and my wifes put together total 50k in Mid cap, small cap and focused fund), Kotak flexi cap - SIP of 15k and 5k in UTI nifty 50 index fund. 2. PPF and Sukanya- would be around 70lac. Total 4 accounts with investment of 6 lac per annum. 3. We have recently purcahsed house worth 3.5cr with an emi of 1.55 lac per month(home loan for around 23 years). Used our PF for our own contribution here. Balance PF amount left around 12 lac. 4. Expenses- rent of 70k, which will be saved now as we moved to our house. Education and other loan emi of 70 k is going on, which will be paid off in december. And our monthly expenses would be around 1 lac. So, need to understand how much is required if we want to retire at 50 max and how to achieve the same?
Ans: Hello;

Firstly if you are the guardian for the PPF account in the name of your minor child then the yearly contribution to your own PPF account and the minor account of your child for which you are the guardian cannot exceed 1.5 L in a financial year cumulatively (75 K each max).

Keep this in mind to avoid refund without interest by the bank later.

The current monthly expenses of around 1 L will be 1.8 L after 10 years considering 6% inflation.

After getting rid of 70 K rent+ 70 K education loan EMI, I would recommend you to enhance monthly sip to 1.25 K per month. The bonus amount of 15 L also should go into MF investments to achieve retirement target in 10 years.

Any increase in income should have commensurate increase in monthly sip to ensure target fulfillment in 10 years.

The 12.5x3=37.5 K monthly investments in PPF and SSY should continue for kids higher education, marriage financial goals.

After 10 years your monthly sips+ lumpsum may reach a corpus of around 6 Cr. Also your existing MF corpus of 60 L may grow into a sum of around 2 Cr. So total corpus for retirement is 8 Cr. (A modest return of 13% is assumed from pure equity mutual fund schemes)

You should use 2 Cr + pf balance to pre close outstanding home loan. The balance 6 Cr corpus you may use to buy an immediate annuity from a life insurance company and you may expect monthly payment of 2.1 L(post tax).[ 6% annuity rate considered)

Hope you both have adequate term life insurance cover(upt 60 age) with suitable riders and adequate personal healthcare cover apart from any group health policy from the company.

Happy Investing!!

You may follow us on X at @mars_invest for updates.

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing.

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Nayagam P

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Career Counsellor - Answered on May 02, 2025

Asked by Anonymous - May 02, 2025
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Can I get NIT Trichy ECE with 98%ile in JEE MAINS 2025 ?? EWS rank 4146
Ans: Providing precise admission chances for each student can be challenging. Some reputed educational websites offer ‘College Predictor’ tools where you can check possible college options based on your percentile, category, and preferences. However, for a more accurate understanding, here’s a simple yet effective 9-step method using JoSAA’s past-year opening and closing ranks. This approach gives you a fair estimate (though not 100% exact) of your admission chances based on the previous year’s data.

Here is, How to Predict Your Chances of Admission into NIT or IIIT or GFTI After JEE Main Results – A Step-by-Step Guide.

Step-by-Step Guide to Check Your Admission Chances Using JoSAA Data
Step 1: Collect Your Key Details
Before starting, note down the following details:

Your JEE Main percentile
Your category (General-Open, SC, ST, OBC-NCL, EWS, PwD categories)
Preferred institute types (NIT, IIIT, GFTI)
Preferred locations (or if you're open to any location in India)
List of at least 3 preferred academic programs (branches) as backups (instead of relying on just one option)
Step 2: Access JoSAA’s Official Opening & Closing Ranks
Go to Google and type: JoSAA Opening & Closing Ranks 2024
Click on the first search result (official JoSAA website).
You will land directly on JoSAA’s portal, where you can enter your details to check past-year cutoffs.
Step 3: Select the Round Number
JoSAA conducts five rounds of counseling.
For a safer estimate, choose Round 4, as most admissions are settled by this round.
Step 4: Choose the Institute Type
Select NIT, IIIT, or GFTI, depending on your preference.
If you are open to all types of institutes, check them one by one instead of selecting all at once.
Step 5: Select the Institute Name (Based on Location)
It is recommended to check institutes one by one, based on your preferred locations.
Avoid selecting ‘ALL’ at once, as it may create confusion.
Step 6: Select Your Preferred Academic Program (Branch)
Enter the branches you are interested in, one at a time, in your preferred order.
Step 7: Submit and Analyze Results
After selecting the relevant details, click the ‘SUBMIT’ button.
The system will display Opening & Closing Ranks of the selected institute and branch for different categories both Home State (HS) i.e. State you belong to & also Other State (OS).
Step 8: Note Down the Opening & Closing Ranks
Maintain a notebook or diary to record the Opening & Closing Ranks for each institute and branch you are interested in, separately for HS & OS Categories for a quick reference.
This will serve as a quick reference during JoSAA counseling.
Step 9: Adjust Your Expectations on a Safer Side
Since Opening & Closing Ranks fluctuate slightly each year, always adjust the numbers for safety.
Example Calculation:
If the Opening & Closing Ranks for NIT Delhi | Mechanical Engineering | OPEN Category show 8622 & 26186 (for Home State), consider adjusting them to 8300 & 23000 (on a safer side).
If the Female Category rank is 34334 & 36212, adjust it to 31000 & 33000.

Follow this approach for Other State candidates and different categories.
Pro Tip: Adjust your expected rank slightly lower than the previous year's cutoffs for realistic expectations during JoSAA counseling.

Can This Method Be Used for JEE April & JEE Advanced?
Yes! You can repeat the same steps after your April JEE Main results to refine your admission possibilities.
You can also follow a similar process for JEE Advanced cutoffs when applying for IITs.

Want to Learn More About JoSAA Counseling?
If you want detailed insights on JoSAA counseling, engineering entrance exams, preparation strategies, and engineering career options, check out EduJob360’s 180+ YouTube videos on this topic!

Hope this guide helps! All the best for your admissions!

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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