Sir I am going to retire in next 3yrs. How much amount I need so that I can get monthly income of Rs70000. And where I should invest those money. Please advice

Ans: You need a corpus of approx 2.5 crores to get 1.25 Lakh monthly. To create 2.5 crores you need to invest 1.41 crores today or SIP of 2.55 lakh in an equity fund

Ans: To achieve a post-retirement income of Rs. 1.25 lakhs per month, it's essential to plan your investments strategically, considering factors such as your age, current salary, inflation, and risk tolerance. Here's a general approach you can consider:

1. **Calculate Retirement Corpus**: Determine the retirement corpus required to generate a monthly income of Rs. 1.25 lakhs. This will depend on various factors such as your expected lifespan, inflation rate, and expected rate of return on investments during retirement.

2. **Estimate Monthly Investment**: Based on your current age, desired retirement age, and expected rate of return on investments, calculate the monthly investment required to accumulate the retirement corpus. You can use online retirement calculators or consult with a financial advisor to determine this amount.

3. **Diversified Investment Portfolio**: Build a diversified investment portfolio that aligns with your risk tolerance and investment objectives. Consider allocating your investments across different asset classes such as equities, mutual funds, fixed deposits, real estate, and other suitable investment options.

4. **Systematic Investment Plan (SIP)**: Start a SIP in mutual funds that offer the potential for long-term growth while managing risk. Choose funds that invest in a mix of equity and debt instruments to balance risk and return. Regularly review and adjust your SIP contributions based on changes in your financial situation and investment goals.

5. **Tax Planning**: Optimize your tax planning to maximize your savings and investment returns. Utilize tax-saving investment options such as Equity Linked Savings Schemes (ELSS), Public Provident Fund (PPF), National Pension System (NPS), and tax-saving fixed deposits to reduce your tax liability and increase your investible surplus.

6. **Regular Review and Adjustments**: Periodically review your investment portfolio and make necessary adjustments to ensure that you're on track to achieve your retirement income goal. Consider factors such as changes in income, expenses, market conditions, and life events when revising your investment strategy.

7. **Consider Professional Advice**: If you're unsure about the optimal investment strategy to achieve your retirement income target, consider seeking guidance from a qualified financial advisor. An advisor can help assess your financial situation, recommend suitable investment options, and develop a customized retirement plan tailored to your needs and objectives.

Remember that achieving a post-retirement income of Rs. 1.25 lakhs per month requires diligent planning, disciplined savings, and prudent investment decisions. Start early, stay focused on your goals, and regularly monitor your progress to ensure a financially secure retirement.

Best regards.

Ans: Evaluating Your Retirement Goal
Your goal to retire at 60 with a monthly income of Rs 2.5 lakhs is ambitious and achievable with proper planning. Let's break down the steps to achieve this goal.

Current Financial Position
Gross Income: Rs 2.5 lakhs per month.

Take Home Salary: Rs 1.70 lakhs per month.

You have 15 years until retirement. Time is your biggest asset in building a substantial retirement corpus.

Estimating Retirement Corpus
Desired Monthly Income Post-Retirement: Rs 2.5 lakhs.

Annual Requirement: Rs 2.5 lakhs * 12 = Rs 30 lakhs.

Inflation Adjustment: Assuming an average inflation rate of 6%, the future value of Rs 30 lakhs in 15 years would be approximately Rs 72 lakhs annually.

Retirement Corpus Calculation: To generate Rs 72 lakhs annually, assuming a safe withdrawal rate of 4%, you will need a corpus of approximately Rs 18 crores.

Investment Strategy
1. Determine Monthly Savings:

Based on your current income and expenses, determine how much you can save and invest each month. Ideally, aim to save and invest at least 30-40% of your take-home salary.

2. Diversified Portfolio:

Invest in a diversified portfolio of mutual funds, stocks, and fixed income instruments. This balances risk and growth.

Investment Options and Allocation
Equity Mutual Funds:

Growth Potential: High returns over the long term.
Risk: High volatility, but suitable for a 15-year horizon.
Allocation: Allocate around 60-70% of your savings here.
Debt Mutual Funds:

Stability: Lower risk and stable returns.
Purpose: Balances the portfolio and provides safety.
Allocation: Allocate around 20-30% here.
Public Provident Fund (PPF):

Safety: Government-backed and risk-free.
Tax Benefits: Offers tax-free returns.
Allocation: Consider contributing up to the maximum limit.
Systematic Investment Plan (SIP):

Regular Investment: Invest a fixed amount monthly in mutual funds.
Rupee Cost Averaging: Reduces the impact of market volatility.
Calculating Monthly Investment
Future Value Calculation:

To reach Rs 18 crores in 15 years, calculate the monthly investment required. Assuming an average annual return of 12% from your investments:
FV = Future Value (Rs 18 crores)
PV = Present Value (monthly investment)
r = monthly return (1% for 12% annual)
n = number of months (180 months for 15 years)
Using financial formulas or a retirement calculator can provide precise figures. However, a rough estimate suggests investing approximately Rs 1 lakh per month.

Steps to Implement the Plan
1. Automate Savings:

Set up automatic transfers to your investment accounts. This ensures disciplined saving and investing.

2. Regular Review:

Review and adjust your investment portfolio annually. Ensure it aligns with your goals and risk tolerance.

3. Emergency Fund:

Maintain an emergency fund covering at least 6-12 months of expenses. This ensures you don't dip into your retirement savings for emergencies.

4. Health Insurance:

Ensure adequate health insurance coverage. Medical expenses can be a significant burden in retirement.

Benefits of Investing through MFD
Professional Guidance:

Certified financial planners and MFDs provide expert advice on fund selection and investment strategies.

Regular Monitoring:

MFDs regularly monitor and review your portfolio, ensuring it remains aligned with your goals.

Tax Efficiency:

Professionals help in structuring your investments to maximize tax benefits.

Conclusion
With a disciplined investment strategy and regular review, achieving your retirement goal is feasible.

Invest in a diversified portfolio, automate savings, and consult with a certified financial planner for personalized advice.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Hello;

Current expenses of 65 K will reach a level of around 1.35 L in 15 years from now when you reach 50 age.

Even if you put entire 65 K in pure equity mutual funds for 15 years it looks tough to generate fixed monthly income good enough to cover your expenses fully at that time.

Hence my suggestion is you get into semi-retirement after 50 and continue some vocation or profession of your choice to also keep you occupied and generate some income for the next 10 years.

However I propose that you start a monthly sip into a combination of pure equity mutual funds for 45 K for
the next 15 years. (10 K each in flexicap, multi cap and large & midcap fund and 5 K in small cap)

This may yield you a corpus of around 2.27 Cr assuming modest return of 12%. This may provide you a post tax monthly income of around 96 K. You need to suppliment this through your alternate vocation.

Also start a monthly investment of 20 K into NPS with the intent to continue it till 60 age. At 60 this may grow into a corpus of around 3.8 Cr considering modest return of 8%.

The combined corpus of 6.07 Cr may yield you a monthly income of around 2.2 L post tax which is in line with your inflation adjusted expenses for 25 years.

Happy Investing;
X: @mars_invest