I am 33 years and earn around 1Lakh per month.
Below are my investments. I want to have a good retirement corpus before 50 or monthly income for 50k
1. Axis ELSS Tax Saver Fund - 15th Dec 2018 - 2500 PM - 1.23L invested till now - paused now as ELSS not needed
2. Tata Small Cap Fund - 28th Aug 2021 -2500PM - 72.49k invested till now
3. UTI Nifty 50 Index Fund - 10th Mar 2023 - 2500PM - 43.99k invested till now
4. Axis Bluechip Fund - 21st Aug 2019 - 2500 PM - 1.32L invested till now
5. Nippon India Growth Fund - 10th Apr 2023 - 2500 PM - 33.87k invested till now
6. Axis Small Cap Fund - 28th Aug 2021 - 2500 PM - 72.49k invested till now
7. Axis Nifty 100 Index Fund - 15th Mar 2024 - 420 PM - 1.8k invested till now
8. Zerodha Nifty LargeMidcap 250 Index Fund - 2221 Lumpsum
9. DSP ELSS Tax Saver Fund - 32.49k Lumpsum
10. Bank of India ELSS Tax Saver - 36.99k Lumpsum
Apart from this i invest 50000 in NPS annually. PPF 1500 annually since 2018
have 2 Flats of approx 45lakh each and have a pending loan of 23lakh for one.
kindly suggest.
Ans: Your diligent approach towards investing and financial planning at 33 sets a strong foundation for achieving your retirement goals. Let's analyze your current investments and outline a strategy to build a robust retirement corpus or secure a monthly income stream by age 50.
Assessing Investment Portfolio
Your diversified investment portfolio comprising Equity Linked Savings Schemes (ELSS), mutual funds, index funds, and other tax-saving instruments reflects a proactive approach towards wealth accumulation. Let's evaluate each component to optimize your retirement strategy.
Equity Investments: Building Long-Term Growth Potential
Equity-oriented funds such as Axis ELSS Tax Saver Fund, Tata Small Cap Fund, Axis Bluechip Fund, and others offer exposure to diversified market segments, aiming for capital appreciation over the long term. While these funds carry market risk, they historically outperform traditional investment avenues over extended periods.
Index Funds: Cost-Effective and Passive Growth
Index funds like UTI Nifty 50 Index Fund and Axis Nifty 100 Index Fund provide broad market exposure while minimizing expense ratios and active management fees. Their passive investment approach mirrors market performance, offering steady growth potential with lower volatility compared to actively managed funds.
Real Estate Holdings: Tangible Asset Accumulation
Owning two flats valued at approximately ?45 lakhs each provides tangible asset accumulation and potential rental income streams. However, considering the pending loan of ?23 lakhs, it's essential to evaluate the overall debt exposure and assess the feasibility of leveraging rental income towards loan repayment.
Supplementary Retirement Contributions: NPS and PPF
Your annual contributions of ?50,000 to NPS and regular investments in PPF demonstrate a disciplined savings approach towards retirement planning. Both NPS and PPF offer tax benefits and long-term wealth accumulation potential, complementing your equity and real estate investments.
Crafting Retirement Strategy
Optimize Equity Portfolio: Consider reviewing your equity portfolio to ensure alignment with your risk tolerance and long-term goals. Periodic rebalancing and diversification across market caps and sectors can mitigate risk and enhance returns.
Evaluate Real Estate Holdings: Assess the rental income potential of your flats and explore options to expedite loan repayment. Strategic debt management can unlock additional cash flows and bolster your retirement savings.
Maximize Tax-Efficient Investments: Leverage tax-saving instruments like ELSS, NPS, and PPF to optimize tax benefits while accelerating retirement savings. Regular contributions and systematic investment planning amplify wealth accumulation potential over time.
Monitor and Adjust: Regularly review your investment portfolio, track performance metrics, and adapt strategies based on changing market dynamics and personal circumstances. Seeking professional guidance can provide valuable insights and optimize investment decisions.
Conclusion
With a proactive approach and diversified investment strategy, achieving your retirement goals before age 50 is within reach. By leveraging equity, real estate, and tax-efficient savings avenues, coupled with prudent portfolio management and strategic debt optimization, you can pave the way towards a secure and fulfilling retirement.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in