How can I reach my goal of 2 crores by 50?

Hi Gurus I'm 39, married and no kids, sole breadwinner in the family. My salary is 1.2 lakh per month and investing in mutual funds (since 2020) through SIP as below and step up investment 10-15% every year. Current corpus stands at 14 lakh. I have 10lakh in my PF account and I get another 5 lakh from gratuity. Mirae Asset tax saver fund 5k Parag parikh tax saver 3k Quant elss 3k Canara robecco small cap 5k SBI small cap 5k Tata digital India fund 5k I have parked 20 lakhs in debt fund and FD which I'm planning to use it to buy a flat within a year. Every month I keep aside 15k towards savings and emergency fund. I move it to debt fund, FD and I invest small portion of my bonus in existing MFs as lumpsum. My goal is to accumulate 2 CR by the time I turn 50 and need suggestions and plans to achieve the same.

Ans: Hello;

Your current MF corpus of 14 L may grow into a sum of 33 L, after 11 years.

Your current monthly SIP of 26 K will need to be topped up by 15% each year upto 11 years.

If you just want to do 10% yearly top-up then the monthly sip amount will be required to be increased to 33 K.(Consider existing funds or good large and midcap type mutual fund for additional sip)

After 11 years this top-up sip may yield you a sum of 1.41 Cr.

Assuming PF corpus to grow at a modest rate of 7.75% into a sum of 22.73 L.

Since your bonus lumpsum additions amounts are not known, they are not factored into the above working.

Adding all these amounts with 5 L gratuity gives you a comprehensive corpus of 2 Cr+ by the time you complete 50 years.

A modest return of 13% is considered from pure equity funds for the calculation.

Happy Investing!!

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

Ans: You are already doing well.

Your income, assets, and mindset show financial discipline. That’s a strong start.

Let’s now evaluate everything from a 360-degree view. This will help you reach your Rs. 10 crore goal comfortably and wisely.

Understanding Your Financial Base
Your combined household income is Rs. 3.85 lakh monthly. That gives a good surplus.

Your total corpus across mutual funds, FDs, shares, PPF, and NPS is about Rs. 35 lakh.

Your term insurance is well covered at Rs. 3 crore. This is very thoughtful.

You have no long-term liabilities. This gives flexibility for long-term planning.

You are staying in a rented house now. You’re planning to buy in 2-3 years.

You wish to retire at 55. You have 22 years left to build a Rs. 10 crore corpus.

Investing Goals: Retire at 55 With Rs. 10 Crore
Rs. 10 crore in 22 years is possible. But it needs disciplined investing.

Your current SIP is just Rs. 15,000. This is too low for such a big goal.

You have enough surplus to invest more. Try to start SIPs of Rs. 70,000 to Rs. 80,000 monthly.

As income rises, increase SIPs every year by 10%-15%. This is called step-up investing.

Stick to equity mutual funds. Choose actively managed diversified funds across categories.

Avoid index funds. They copy the market and lack fund manager wisdom.

Actively managed funds aim to beat market returns. That helps build wealth faster.

Don’t use direct funds. Use regular funds through an MFD with a Certified Financial Planner.

Direct funds save commission but need your own effort. Regular route gives expert review.

House Purchase Plan in 2-3 Years
You plan to buy a house worth Rs. 80 lakh to Rs. 1 crore.

Don’t use your long-term corpus for this. Use a separate plan.

Save the house down payment in a safe and liquid fund.

You may need Rs. 20 lakh to Rs. 25 lakh as down payment.

Don’t invest this amount in equity mutual funds now. Your timeline is short.

Use ultra short-term or low-duration debt mutual funds for next 2-3 years.

Buying a house brings EMI burden. That will reduce your SIP capacity.

After buying the house, keep investing at least 30%-35% of your income.

Take home loan only if you’re ready to stay in that house for 10+ years.

Review of Existing Investments
You have Rs. 20 lakh in mutual funds. Great start.

Review fund performance with a Certified Financial Planner once a year.

Avoid keeping underperforming funds. Stick to 4-6 funds only.

Your FD of Rs. 5 lakh is low yielding. Shift it slowly to equity SIPs.

Keep 3-6 months’ expenses in FD or liquid funds only. Rest can go to equity.

PPF is a safe tool. Rs. 1.5 lakh yearly is a good target.

But don’t expect it to build wealth. Use it only for fixed-income safety.

NPS has low cost and long lock-in. Rs. 1 lakh annual contribution is good.

But equity exposure in NPS is capped. So combine NPS with MF SIPs.

Your equity shares worth Rs. 3.2 lakh should be reviewed.

Don’t trade often. Don’t hold poor quality stocks. Exit if stocks underperform.

LIC Annual Premium of Rs. 82,000
Please review your LIC policy carefully. What are the returns?

If it is endowment or money-back, likely returns are low.

Most such plans give 4%-5% post-tax returns.

These are not wealth creators. They are inefficient.

If surrender value is fair, consider surrendering.

Reinvest the amount in mutual funds through SIPs.

You already have good term insurance cover. That is enough.

Budget and Surplus Utilisation
Your rent is Rs. 45,000 monthly. Try to save 40% of your take-home.

That means Rs. 94,000 monthly can go towards SIPs and other investments.

Use Rs. 15,000 for PPF and NPS.

Use Rs. 75,000 to Rs. 80,000 for mutual fund SIPs.

If you can save more from bonuses, invest lump sum into MFs.

Avoid lifestyle inflation. Don’t increase expenses with income.

Spouse’s Income and Joint Planning
Your wife earns Rs. 1.5 lakh monthly. Include her in financial planning too.

If she has fewer expenses, she can also invest Rs. 50,000 to Rs. 60,000 monthly.

Use her PAN to invest in mutual funds. This helps split future tax liability.

Plan one joint portfolio. Track it together every year.

Taxation Awareness and Strategy
Equity MF gains above Rs. 1.25 lakh yearly are taxed at 12.5%.

Short-term gains are taxed at 20%. Plan redemptions wisely.

Debt MFs are taxed as per income slab. Choose only for short-term goals.

Invest more in equity for long-term growth.

Use the Rs. 1.5 lakh 80C limit for PPF and term plan premiums.

NPS gives extra Rs. 50,000 deduction under 80CCD(1B).

File taxes carefully. Keep investment proofs organised.

Retirement Plan Structure
You want Rs. 10 crore corpus by 55. Let’s break that down.

You have 22 years. Start investing Rs. 1.2 lakh monthly from combined income.

Increase SIPs yearly by 10%-15%. This step-up plan is key.

Don’t withdraw from corpus midway. Let compounding work.

At 55, shift corpus to hybrid funds or SWP funds.

Use monthly SWP for income. Keep taxation in mind.

Review retirement plan every 3 years.

Risk Management and Emergency Planning
You are well insured with term plans.

Check if your wife also has term insurance.

Health insurance is not mentioned. Please take Rs. 10-15 lakh family floater plan.

If you already have employer health cover, still buy a personal policy.

Build an emergency fund of Rs. 5-6 lakh. Keep in liquid fund or FD.

Don’t invest emergency fund in risky assets.

Asset Allocation Recommendation
Equity Mutual Funds: 65% of your total portfolio

NPS + PPF: 20% for stability

Liquid + Emergency Funds: 10%

Stocks: 5% max (only good quality)

Real estate is not suggested. It locks capital and gives poor liquidity.

Mutual funds give better flexibility and return potential.

Investment Habits To Maintain
Review portfolio once a year with a Certified Financial Planner.

Track returns, reallocate if needed.

Don’t time the market. Keep SIPs running in good and bad times.

Avoid new age quick schemes. Stay with basics.

Keep life simple and focused.

Final Insights
Your plan is strong. But it needs higher investments to reach Rs. 10 crore.

Delay home buying if it affects SIP strength.

Stick to mutual funds. Avoid insurance products for investment.

Keep tax planning in mind. Don’t ignore inflation.

Include your spouse in every goal. Joint wealth building works better.

Your financial freedom at 55 is possible with right focus and discipline.

Let compounding be your best partner over 22 years.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment