Hi Experts, I am 31 yrs old and investing 48k mer month in SIP, 1.5L per year in PPF ans 96k per year in NPS. My existing portfolio is 31L. I am planning to retire by the age of 45 and would like to have a income of 1.25L per month. Can you please suggest if it is achievable with the existing investment.

Ans: Assessing Your Retirement Goal
Introduction
It's great to see your commitment to building a strong financial future. At 31, with disciplined investments, achieving your retirement goal by 45 is within reach.

Current Investments
Your current investment strategy is diversified and solid:

SIP: ?48,000 per month
PPF: ?1.5 lakh per year
NPS: ?96,000 per year
Existing Portfolio: ?31 lakh
This diversified approach provides a good mix of equity and debt.

Retirement Goal
You aim to retire at 45 with a monthly income of ?1.25 lakh. Let’s evaluate if this is achievable.

SIP Investments
Investing ?48,000 per month in SIPs is excellent. Assuming a conservative annual return of 12%, this can grow substantially over the next 14 years.

PPF Contributions
PPF is a safe and tax-efficient investment. The annual contribution of ?1.5 lakh, assuming an interest rate of 7.1%, will grow steadily.

NPS Contributions
NPS offers a good mix of equity and debt with additional tax benefits. An annual contribution of ?96,000, assuming a moderate return of 10%, will also grow well over time.

Total Investment Growth
Combining SIPs, PPF, and NPS contributions with your existing portfolio, let’s project the growth over 14 years. Regular investments and compounding will significantly boost your corpus.

Estimating Retirement Corpus
SIP Growth: ?48,000 monthly SIP for 14 years at 12% returns.
PPF Growth: ?1.5 lakh yearly for 14 years at 7.1% returns.
NPS Growth: ?96,000 yearly for 14 years at 10% returns.
Existing Portfolio Growth: ?31 lakh growing at an average of 10%.
Combining these, your total corpus should be substantial. Detailed calculations by a CFP can provide precise figures.

Income from Corpus
To generate ?1.25 lakh monthly, or ?15 lakh annually, you need a significant corpus. Assuming a 4% safe withdrawal rate, the required corpus is approximately ?3.75 crore.

Achievability
With disciplined investments, reaching a corpus close to ?3.75 crore is achievable. Regular reviews and adjustments can ensure you stay on track.

Recommendations
Continue SIPs: Stick with your ?48,000 monthly SIPs.
Maximize PPF Contributions: Keep contributing ?1.5 lakh annually.
Regular NPS Contributions: Continue contributing ?96,000 annually.
Portfolio Review: Regularly review and rebalance your portfolio with a CFP.
Professional Advice
Consulting a Certified Financial Planner (CFP) can provide tailored advice and help optimize your investments. They can help with tax planning, fund selection, and retirement strategies.

Conclusion
Your disciplined approach and diversified investments set a strong foundation for your retirement goal. With regular reviews and adjustments, achieving your desired monthly income by 45 is within reach.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in