Hello. I have a SIP of Rs 58,000 per month across large, flexi, mid and small caps whose value is now Rs 16.5 lakhs. I intend to continue investing the same amount of Rs 58,000 per month for the next 15 years. Assuming a return of 10% , how much corpus can I expect to build at the end of the 15th year? Thank you

Ans: Funds are decent and the corpus that can get created with above investment in 10 years is Rs 37 lakh therefore for a corpus of Rs 1 cr in 10 years, monthly investment of Rs 40000 / - or additionally Rs 25000 per month.

Ans: To estimate your corpus after 7 to 8 years, let's assume an average annual return on your mutual fund SIPs at 10-12% and a similar return on your other investments.

For Mutual Funds:

Future Value of Current Investments: Using the future value formula, considering an average return of 10-12%, your current 1.09 crore can grow to approximately 2.2 - 2.5 crores in 7-8 years.
Future Value of Additional SIPs: Investing 35k per month for 7-8 years, at an average return of 10-12%, you could accumulate around 50 - 60 lakhs from SIPs alone.
For Other Investments:

Future Value of Current Investments: Assuming an average annual return of 10-12%, your current 1 crore can grow to approximately 2 - 2.4 crores.
Future Value of Additional Investments: With 80k monthly investments for 7-8 years, at an average return of 10-12%, you could accumulate around 1.5 - 1.8 crores.
Total Corpus After 7-8 Years: Combining both, your total corpus could range from 5.2 - 6.2 crores.

Retirement Planning:
Considering your monthly expense is 1 lakh, with a corpus of 5.2 - 6.2 crores, you can generate approximately 40-50k per month (assuming a 7-8% withdrawal rate) post-retirement. This should be sufficient considering your current expenses, but inflation and unforeseen expenses should also be considered.

It's advisable to consult a financial advisor for a detailed plan tailored to your needs, considering inflation, tax implications, and other factors.

Ans: It is really great to see that you have started to plan for your post-retirement life and you have accumulated ample amount till now.

If you continue in the same way with a monthly SIP of Rs. 80,000, I am convinced that you will have enough corpus to support yourself throughout retirement.

Accumulated corpus in 8 years with monthly investment of 80,000 and present value 1.09 Crore will likely be 4.12 Crores. Rate of return considered for the calculation is 12% CAGR.

Assuming that you want to maintain your current monthly expense of ₹1 lakh in retirement, it is important to factor in inflation, which will erode the value of your money over time.

Since you have other avenues as well to support your expenses, this will help to create a heftier corpus.

Recommendations:
• Invest in a mix of equity and debt mutual funds to diversify your portfolio and reduce risk.
• Rebalance your portfolio regularly to maintain your appropriate asset allocation as per your requirement.
• Consult with a financial advisor to develop a comprehensive retirement plan.

Ans: You are on the right track Subho. Longevity has increased. Post-retirement risk free interest rate has come down. Inflation has gone up.

So when planning for retirement corpus, back-of-the-envelope calculations won't work. You need to project your financial life from now to retirement and retirement to life expectancy. If it is not possible for you to do that, then approach a financial planner who will be able to create a financial roadmap.

Ans: It is difficult to predict the exact corpus amount you will accumulate by 2034 due to the following reasons:

• Market Fluctuations: Equity mutual funds invest in stocks, and the stock market fluctuates over time. This means that the actual returns you will get can be higher or lower than the estimated range of 8-12%.
• Fund Performance: The performance of each mutual fund you have chosen can vary. Some funds may outperform the average market return, while others may underperform.

However, I can provide you with an estimated range of corpus amounts based on your SIP amount, investment period, and expected return rate. Here's how you can calculate it:

SIP Calculator: You can use an SIP calculator available online or provided by your mutual fund provider. These calculators take into account your monthly investment amount, investment tenure, and expected return rate to estimate the maturity amount.

Manual Calculation (Simplified):

• Total Investment: Multiply your monthly SIP amount (Rs 75,000) by the number of months you will invest (10 years * 12 months/year) = Rs 9,000,000
• CAGR (Compound Annual Growth Rate): This is the average annual return you expect on your investment. Since you expect a range of 8-12%, consider different CAGRs within this range (e.g., 8%, 10%, 12%)
• Future Value Formula: Use the Future Value (FV) formula to calculate the estimated corpus amount for each CAGR. You can find the FV formula online or in finance textbooks.

Example:

Let's say you calculate the future value for a CAGR of 10% using the FV formula:

FV = P * [(1 + r)^n - 1 ] / r

Where:

• FV = Future Value
• P = Monthly Investment (Rs 75,000) * Investment Tenure (120 months) = Rs 9,000,000
• r = Expected Return Rate (as a decimal) = 10% / 100 = 0.1
• n = Number of compounding periods (monthly in this case) = 120 months

Estimated Corpus with 10% CAGR:

FV = Rs 9,000,000 * [(1 + 0.1)^120 - 1 ] / 0.1 ≈ Rs 69,531,106

Repeat the FV calculation for other CAGR values (8% and 12%) to get a range of possible corpus amounts.

Important Note: These are just estimates, and the actual corpus amount you will get may be different.

Here are some additional points to consider:

• Diversification: You have chosen a good mix of funds across different categories (large-cap, mid-cap, flexi-cap, and sectoral). This helps diversify your investment and potentially reduce risk.
• Review your SIPs: Periodically review the performance of your mutual funds and adjust your SIP allocation if necessary.

I hope this helps!