Hi Anil, I am 42 years old and want to have a retirement corpus from which I can earn a monthly return of Rs 2 lakhs. I have assets - Property + Savings worth 1 Crore currently. Can you please suggest the Mutual Funds/Stocks/Other assets to invest to real my retirement corpus in 15 years.

Ans: SIPs in funds below can be considered.

• Axis ESG Equity Fund -- Growth
• UTI Flexicap Fund -- Growth
• DSP Quant Fund -- Growth
• Samco Flexicap fund -- Growth
  
  

Ans: Monthly SIP amount of Rs 27500 will be required to achieve the targets:

Below are few funds that can be considered for creating a corpus of Rs 1.5. Crs in 15 years

1. UTI Flexi Cap Fund -- Growth
2. Parag Parikh Flexi Cap Fund -- Growth
3. Axis ESG Equity Fund -- Growth
4. Motilal Oswal Focused 25 Fund -- Growth

Around 13^th year or when you reach 57/58 years in age to reduce the volatility in the corpus shift to Debt Funds (Couple of Banking and PSU and one Corporate Bond Fund) along a Hybrid Balanced advantage fund

Ans: You need 5crs at the age of 62yrs if you need a monthly income of 2.5L per month
In order to get there in 6yrs , your sip amount has to be about 4.7L per month or a mix of lumpsum and sip since your monthly income is 3L per month so you cannot do a sip of 4.7L per month

Ans: I have no idea about your risk profile or what have you accumulated so far. In giving my reply, I am assuming the following:-
1. You are open to full equity investing which is actually the rightful way to go about for such long-term targets
2. Equity will give an overall 12% returns CAGR (Comp0unded Annual Growth Rate)
3. PPF will give an average 6% yearly returns.
4. Assuming that you have zero accumulation so far as you have not given anything in your data
5. You will continue the same regular investments without any increase or decrease and not take out any money from these investments.

You are likely to accumulate about Rs 16.5 Crores by the age of 60 years.
If you wish to accumulate Rs 30 Crores in the given timeframe, you would have to make an investment of Rs 1.8 Lakhs a month. If you cannot contribute this much, a good way of course would be to keep increasing your monthly contributions as your monthly income increases at say 7-10% per year.

By the way, my name is Col Sanjeev Govila and not Ulhas!

Ans: You are 56 years old and plan to retire by 65. You aim for a retirement corpus of Rs. 5 crores. Your monthly earnings from your job are Rs. 1 lakh. You have investments in real estate but no exposure to mutual funds or SIPs. Let’s create a strategy to achieve your goal.

Building Your Retirement Corpus
Assessing Your Current Situation
Age: 56 years
Retirement Age: 65 years
Current Monthly Earnings: Rs. 1 lakh
Goal: Rs. 5 crores by 65 years
Creating an Investment Plan
Emergency Fund
Set Aside Funds: Keep an emergency fund for unexpected expenses.
Recommended Amount: At least 6 months of expenses in a savings account or liquid fund.
Purpose: Provides financial stability in case of emergencies.
Systematic Investment Plan (SIP)
Start SIPs: Invest monthly in diversified mutual funds.
Monthly Contribution: Allocate a portion of your monthly income towards SIPs.
Benefit: Helps in disciplined investing and rupee cost averaging.
Diversified Portfolio
Mix of Funds: Invest in a mix of equity and debt funds.
Actively Managed Funds: Choose funds managed by experienced professionals.
Growth Potential: Equities offer higher returns over the long term, while debt funds provide stability.
Lump Sum Investments
Initial Investment: Use part of your savings for a lump sum investment.
Diversification: Split the lump sum across various funds to reduce risk.
Insurance Coverage
Health Insurance
Ensure Adequate Coverage: Have a health insurance policy covering major medical expenses.
Premium Allocation: Budget a portion of your income for health insurance premiums.
Life Insurance
Term Insurance: Secure a term plan to cover your family's financial needs.
Premium Budget: Set aside funds for life insurance premiums.
Regular Review and Adjustment
Quarterly Reviews
Performance Monitoring: Review the performance of your investments quarterly.
Necessary Adjustments: Make changes to stay aligned with your financial goals.
Annual Rebalancing
Portfolio Rebalancing: Adjust the allocation between equity and debt to maintain the desired risk level.
Goal Alignment: Ensure your investments align with your financial objectives.
Avoiding Real Estate Investments
Limited Liquidity
Issue: Real estate investments can be illiquid and hard to convert into cash quickly.
Solution: Focus on more liquid investments like mutual funds and SIPs.
Benefits of Regular Funds through a CFP
Expert Guidance
Tailored Strategies: Get investment strategies customized to your needs.
Continuous Monitoring: Regular assessment and adjustment of your portfolio.
Disadvantages of Index Funds
Lower Flexibility
Lack of Active Management: Index funds are passively managed and may not outperform the market.
Benefit of Active Funds: Actively managed funds have the potential for higher returns due to professional management.
Final Insights
To achieve your retirement goal of Rs. 5 crores by age 65:

Start SIPs: Invest a portion of your monthly income in diversified mutual funds.
Maintain Insurance: Ensure you have adequate health and life insurance.
Review Regularly: Monitor and adjust your investments periodically.
Seek Expert Advice: Consult a Certified Financial Planner for tailored guidance.
By following this strategy, you can build a substantial retirement corpus.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in