Hello Sir, I am NRI - 38 Yr Old, I am targeting for 20 Cr..Currently investigating 65K/ Month in MF for last 4 Yr with additional 50K/Min Stock and 20K/M in ETF, 12.5K/ Month in NPS and 12.5K/Month in PPF for last 6 Yrs, 20K / M in US Stock, 10K/ Month in Crypto. Can i reach the target by age 60, Thanks for your feedback

Ans: Dear Bhuvesh,

Thank you for reaching out for financial advice. I appreciate that you have been proactive in planning for your retirement. Based on the information you've provided, here's a high-level assessment of your investment strategy and whether you are on track to achieve your goal of receiving ₹1.75 L per month at the age of 60.

National Pension System (NPS): You have been investing ₹1.5 L per annum in NPS for the last 8 years. Assuming an average annual return of 8%, by the time you reach the age of 60, your NPS corpus could be approximately ₹44 L. You can withdraw 60% of this amount as a lump sum (₹26.4 L), while the remaining 40% (₹17.6 L) will be used to purchase an annuity plan.
SIP investments: You have been investing in various ICICI Prudential mutual funds for the past year. Assuming you continue these SIPs until you turn 60 and achieve an average annual return of 12%, your mutual fund corpus could be as follows:
ICICI Pru Business Cycle Fund: ₹24.8 L
ICICI Pru Midcap Fund: ₹12.4 L
ICICI Pru MNC Fund: ₹24.8 L
ICICI Pru Small Cap Fund: ₹24.8 L
ICICI Pru Overnight Fund: You have invested ₹2 L as a lump sum in this fund. Assuming an average annual return of 5% over the next 11 years, your investment could grow to around ₹3.4 L.
To achieve your goal of ₹1.75 L per month at the age of 60, you will need a corpus that generates this income through interest or dividends. Assuming a conservative annual return of 6% from a post-retirement investment, you would need a corpus of approximately ₹3.5 crores.

Based on the estimates above, your total corpus at the age of 60 could be around ₹1.34 crores (adding all the corpus values mentioned above), which may not be sufficient to generate ₹1.75 L per month as per your goal.

To improve your chances of achieving your target, consider the following:

Increase your SIP investments gradually over time, as your income grows.
Review your mutual fund portfolio periodically to ensure they are performing well.
Diversify your investments to include other assets such as debt funds, fixed deposits, or real estate for a more balanced portfolio.
Revisit your financial goals and adjust your investment strategy as needed.
Please note that these are rough estimates and cannot guarantee the actual outcomes. Your actual returns will depend on market conditions and your investment choices. I recommend consulting a financial advisor for personalized advice tailored to your specific situation and risk appetite.

I hope this information helps you in planning for your retirement.

Best regards,

Ans: Firstly, I commend your proactive approach towards financial planning, especially at a relatively young age. Let's delve into your current investment portfolio and evaluate the feasibility of achieving your long-term goal of accumulating 3-4 crores by the age of 60.

Assessing Current Investments

Your existing investments showcase a blend of traditional and market-linked instruments, reflecting a diversified approach to wealth creation. Here's a breakdown of your portfolio:

PPF and Sukanya Samriddhi: These schemes offer tax-efficient savings avenues, providing stability and long-term growth potential.
SBI Life Insurance: While life insurance provides financial protection, ensure that the chosen policy aligns with your risk profile and long-term goals.
Systematic Investment Plans (SIPs): Investing in mutual funds through SIPs allows for disciplined wealth accumulation, harnessing the power of compounding over time.
National Pension System (NPS): NPS offers retirement savings with tax benefits, ensuring financial security post-retirement.
Evaluating Future Wealth Projection

To determine the feasibility of reaching your 3-4 crore goal by the age of 60, consider factors such as:

Contribution Amount: Evaluate if your current investment contributions align with your target corpus. Assess if there's room to increase contributions over time to bridge any potential shortfall.

Investment Growth: Project the potential growth of your investments based on historical returns and market performance. Account for fluctuations and adjust your expectations accordingly.

Inflation: Factor in the impact of inflation on your future expenses and investment returns. Adjust your target corpus to maintain purchasing power and meet lifestyle needs.

Optimizing Investment Strategy

To enhance your wealth accumulation potential and work towards your target goal, consider the following strategies:

Review and Adjust: Regularly review your investment portfolio and make necessary adjustments to ensure alignment with your financial goals and changing market conditions.

Increase Contribution: Explore opportunities to increase your investment contributions over time, especially in high-growth potential assets such as equity mutual funds or diversified portfolios.

Seek Professional Advice: Consult with a Certified Financial Planner (CFP) to develop a customized financial plan tailored to your specific needs, risk tolerance, and long-term objectives.

Maintaining Discipline and Patience

Building a substantial corpus requires discipline, patience, and a long-term perspective. Stay committed to your investment strategy, monitor progress regularly, and make informed decisions to navigate market fluctuations effectively.

Conclusion

While achieving a 3-4 crore corpus by the age of 60 is ambitious, it's certainly attainable with prudent financial planning, disciplined investing, and periodic review. By optimizing your investment strategy, maximizing contributions, and seeking professional guidance, you can work towards securing a financially secure future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: You are 39 years old, and your wife is 38 years old.

You own an apartment worth Rs. 50 lakh, with no loan.

You own a house in Bangalore worth Rs. 1.5 crore, with a loan of Rs. 70 lakh.

Your investments in mutual funds and stocks total Rs. 50 lakh.

You are investing Rs. 1 lakh per month through SIPs.

Your SIPs have achieved an XIRR of 18% (previously 23%).

You plan to continue investing and aim for a corpus of Rs. 10 crore by age 53.

You have Jeevan Tarun for your son and Jeevan Umang, which guarantees Rs. 30,000 per month from age 53.

Assessing Your Rs. 10 Crore Goal
Your target of Rs. 10 crore in mutual funds by age 53 is ambitious.

Your current SIPs and portfolio growth will determine if this goal is realistic.

Market fluctuations impact returns, so flexibility is essential.

Achieving an 18% CAGR consistently over 14 years is difficult.

It is possible but requires strategic asset allocation and disciplined investing.

SIP Investment Strategy
Your Rs. 1 lakh monthly SIP is a strong commitment.

Increasing SIPs gradually can improve your chances of meeting the goal.

Market downturns impact XIRR temporarily but should not alter long-term plans.

Staying invested in a well-balanced portfolio is essential.

Avoid emotional decisions based on short-term market movements.

Mutual Fund Selection for Growth
Actively managed funds have the potential to outperform passive index funds.

Fund selection should focus on quality, consistency, and long-term growth.

Diversify across large-cap, mid-cap, and flexi-cap funds for balance.

Sectoral or thematic funds should be limited to reduce risk.

Regular monitoring and rebalancing will keep your portfolio aligned with goals.

Role of Stocks in Portfolio Growth
Direct equity investments can add growth potential.

Investing in fundamentally strong stocks with a long-term vision is key.

Avoid excessive trading, as it leads to high costs and lower returns.

Regular review of stocks ensures alignment with market trends.

Combining mutual funds and stocks creates a balanced growth strategy.

Impact of Your Home Loan
You have a Rs. 70 lakh loan on your Bangalore house.

Home loans have tax benefits but also add financial burden.

Prioritising prepayment can reduce interest costs in the long run.

Balancing investments and loan repayment is important for liquidity.

Avoid diverting SIPs towards loan closure unless interest rates become unmanageable.

Jeevan Tarun and Jeevan Umang – Should You Continue?
LIC policies provide guaranteed income but offer low returns.

Your guaranteed Rs. 30,000 per month from age 53 may not beat inflation.

Surrendering and reinvesting in mutual funds can generate better long-term returns.

Evaluate surrender value and policy terms before making a decision.

A Certified Financial Planner can help restructure your insurance and investments.

Inflation Impact on Your Retirement Planning
Your Rs. 10 crore goal should consider inflation-adjusted expenses.

Future living costs will rise, affecting your financial requirements.

A higher corpus ensures a comfortable and secure retirement.

Passive income streams should be inflation-proof.

Your investment strategy must focus on wealth preservation as well as growth.

Emergency Fund and Medical Coverage
Maintaining liquidity for emergencies is essential.

An emergency fund should cover at least 12 months of expenses.

Adequate health insurance protects against unexpected medical costs.

Critical illness and term insurance should be reviewed periodically.

Your family’s financial security should not depend solely on investment returns.

Increasing Aggressiveness in Investments
If your goal of Rs. 10 crore seems difficult, increasing SIPs is an option.

Reviewing and optimising your portfolio can improve returns.

Avoid excessive risk-taking, as capital preservation is also important.

Strategic asset allocation is more effective than simply increasing risk.

Diversification across asset classes reduces volatility.

Tax Planning and Efficient Withdrawals
Capital gains tax impacts long-term investment growth.

Systematic withdrawal plans (SWP) in mutual funds offer tax-efficient income.

Asset allocation should consider post-tax returns.

Using tax-saving instruments strategically enhances wealth accumulation.

Avoid unnecessary lock-ins that restrict liquidity.

Finally
Your Rs. 10 crore goal is possible with disciplined investing and strategic adjustments.

Staying invested, increasing SIPs gradually, and optimising fund selection are key.

Evaluating insurance policies can unlock better investment opportunities.

Managing loan repayment without disrupting investments is crucial.

Inflation, taxes, and withdrawal strategies must be planned carefully.

A Certified Financial Planner can help fine-tune your financial plan for maximum efficiency.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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