Hello Sir. I am 37 years old and do not have any investments till date other than NPS and EPF. I would like to start now. My take home is 70K/month. How much should I start investing for sufficient corpus for retirement and small goals. Who can help me with investment - like managers or online like groww?

Ans: As per your query, you require Rs 1 lakh per month (today’s cost) after retirement. Considering inflation to maintain same purchasing power you would be requiring around Rs 3.20 lakh per month approximately. Thus assuming you will be retiring at 60 and life expectancy till age 75, you are required to do an SIP of Rs 57,000 (Approx) per month for 20 years with an assumed ROI of 10%.

The suggestion on investment avenues and choice of product also depends on further aspects such as risk appetite, asset allocation and cashflows etc. Thus, in overall view you can go for good combination of large, flexi, mid and some hybrid fund to construct a holistic portfolio including distinct product to reach the goal efficiently. Periodic review of investment is also crucial.

Ans: At age 47, it's commendable that you are thinking about your retirement needs. Maintaining your current lifestyle post-retirement requires careful planning. Let's analyse your current financial situation and what you need to achieve your retirement goals.

Current Financial Status
Your monthly expense is ?100,000, and your income from house rent is ?40,000.

You have accumulated significant assets:

Provident Fund (PF): ?50 Lakhs

Shares: ?8 Lakhs

Fixed Deposits (FD): ?4 Lakhs

Sovereign Gold Bonds (SGB): ?12 Lakhs

These assets show that you have diversified investments, which is excellent for balancing risk.

Estimating the Retirement Corpus
To maintain the same lifestyle after retirement, you need to consider inflation. Your expenses will likely increase over time due to inflation. Assuming a 6% annual inflation rate, your current monthly expenses of ?100,000 will be much higher when you retire at 60.

You'll need a corpus that can generate enough income to cover these expenses. Let's assume you live up to 85 years. This means your corpus should last for 25 years post-retirement.

Calculating the Required Corpus
Estimating the exact corpus involves complex calculations. A Certified Financial Planner can help with precise numbers. However, a rough estimate is that you need about 20-25 times your annual expenses at the time of retirement.

Given your current expenses, you might need a corpus of around ?6-7 crores, factoring in inflation.

Investment Strategy to Build the Corpus
You need to start investing more aggressively to reach your retirement goal. Here's a suggested strategy:

1. Increase Equity Investments

Equities typically offer higher returns compared to other asset classes. Consider increasing your investment in actively managed equity mutual funds. These funds are managed by professional fund managers who aim to outperform the market.

2. Systematic Investment Plan (SIP)

Start a SIP in mutual funds. It helps in averaging the cost of investment and provides disciplined investing. SIPs are ideal for long-term wealth creation.

3. Diversify Your Portfolio

Diversification reduces risk. You already have SGBs, FDs, and shares. Ensure a good mix of equity, debt, and gold. This balanced approach mitigates risks.

4. Consult a Certified Financial Planner

A Certified Financial Planner can help tailor a plan specific to your needs. They can provide guidance on asset allocation, risk management, and tax efficiency.

Managing Your Existing Assets
Provident Fund (PF)

Your PF is a secure and stable investment. Continue contributing to it. It provides a safety net with assured returns.

Shares and Equity

Monitor your share portfolio regularly. Avoid putting all your money in one stock. Diversify across sectors to minimize risk.

Fixed Deposits (FD)

FDs are safe but offer lower returns. Consider using them for emergency funds or short-term goals.

Sovereign Gold Bonds (SGB)

SGBs are good for diversification. They also provide a hedge against inflation. Keep them as part of your portfolio.

Regular Review and Adjustment
Regularly review your financial plan. Adjust your investments based on market conditions and your changing needs. Stay informed and adapt to new financial opportunities.

Conclusion
Planning for retirement requires a strategic approach. Your current assets provide a strong foundation. By investing wisely and consulting a Certified Financial Planner, you can achieve your retirement goals.

You have already taken the first step by evaluating your needs. With disciplined investing, you can ensure a comfortable retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: That's a fantastic goal! Looking to build a Rs. 1 crore corpus by 60 with a Rs. 75,000 monthly salary is a smart move. Let's get you started!

Planning for your future:

Time is your friend! Starting at 37 gives your investments a long time to grow through compounding.
We need a plan! Consider consulting a Certified Financial Planner (CFP). They can create a personalized plan considering your income, expenses, risk tolerance, and goals.
Understanding your investments:

Actively managed funds: Unlike index funds, these funds have professional managers who aim to outperform the market. We can explore options that suit your risk profile.
Regular investments: Setting up a Systematic Investment Plan (SIP) helps you invest a fixed amount regularly, building discipline and benefiting from rupee-cost averaging.
Now, about the numbers:

While I can't give specific investment amounts without a detailed plan, here's a general idea:

Factor in inflation: Aim to build a corpus that considers inflation, so your Rs. 1 crore today has the same buying power when you retire.
Investment returns: Expected returns from your investments will impact the amount you need to invest monthly.
Next steps:

Talk to a CFP! They can help you determine the ideal monthly SIP amount based on your goals and risk profile.
Start investing early! Even a small amount invested regularly can grow significantly over time.
Remember:

Building a corpus takes discipline. Stick to your investment plan!
Regularly review your plan with your CFP to ensure it stays aligned with your evolving goals.
I hope this helps!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Planning for a Rs 30 crore corpus is a bold and visionary goal. This shows your ambition for a financially secure retirement. To achieve this, disciplined planning and consistent action will be essential.

Three factors will influence your success:

Time available for investment (24 years from age 36 to 60).

Your investment strategy and allocation.

Rate of return on your investments.

It is also commendable that you are starting to plan early. This provides a clear advantage.

Importance of Starting Early
Starting early offers compounding benefits. The earlier you invest, the longer your money grows. Although you plan to start at 36, preparing now will help you save more efficiently.

While you're pursuing studies, focus on financial knowledge. Learn about wealth creation and disciplined investing.

Understanding Your Current Situation
Your current financial status includes:

No savings or investments yet.

Time to complete higher studies.

A six-year gap before beginning savings.

This situation calls for structured financial planning starting immediately.

Suggested Steps to Prepare
Step 1: Gain Financial Knowledge

Learn about mutual funds, equity, debt instruments, and other investment options.
Understand risk and reward in different financial instruments.
Step 2: Estimate Your Monthly Investment Needs

Begin calculating how much you will need to save monthly from age 36.
Factor in inflation, expected returns, and the goal amount of Rs 30 crore.
Step 3: Enhance Your Earning Potential

Focus on career advancement to increase your income post studies.
Higher earnings will help you save and invest more aggressively.
Step 4: Build Financial Discipline Early

Even before age 36, aim to save small amounts from any available income.
Practice setting aside a fixed percentage of income for future investment.
Action Plan at Age 36
Once you start earning, follow a focused investment strategy. A diversified portfolio can maximise returns and manage risks.

Prioritising Mutual Fund Investments
Mutual funds offer flexibility, professional management, and growth potential.

Actively managed funds can outperform index funds. Experienced fund managers aim for higher returns.

Avoiding Direct Funds
Direct funds may lack guidance for new investors.

A Certified Financial Planner can help optimise returns through regular funds.

Regular funds through MFDs come with expert advice and periodic review.

Diversified Asset Allocation
Allocate funds between equity, debt, and gold based on risk tolerance.

Higher equity allocation in early years can boost growth.

Gradually shift towards safer instruments as you approach retirement.

Tax Efficiency in Investments
Keep the new mutual fund capital gains taxation rules in mind.

Long-term capital gains (LTCG) above Rs 1.25 lakh are taxed at 12.5%.

Short-term capital gains (STCG) are taxed at 20%.

For debt mutual funds, gains are taxed as per your income slab.

Plan investments in a way to minimise tax liability and maximise returns.

Building Contingency and Insurance
Before starting investments:

Build a contingency fund of 6-12 months' expenses.

Secure health and life insurance for family protection.

Regular Review and Rebalancing
Periodically review your investment portfolio.

Rebalance asset allocation to match changing goals and market conditions.

Consult your Certified Financial Planner regularly for updates.

Final Insights
Achieving a Rs 30 crore retirement corpus is possible with determination. Begin with structured planning and financial discipline. Post-36, invest systematically and review your progress regularly.

The journey may seem challenging but is highly rewarding. Your foresight and commitment will ensure financial independence in retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment