Home > Money > Question
Need Expert Advice?Our Gurus Can Help

Investing 100000/month, 50000/annum - What will be Corpus in 2030?

Ramalingam

Ramalingam Kalirajan  |7322 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 13, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - Nov 12, 2024Hindi
Money

I am investing 100000 every month as SIP and 50000 annually. My present SIP Corpus is nearly 2Cr. How much is expected to be the total corpus in 2030 if I manage to continue the same investment model.

Ans: I appreciate your consistent commitment to investing. Systematic Investment Plans (SIPs) and annual investments are powerful tools to build substantial wealth over the long term. Your current SIP portfolio is already impressive, and with continued discipline, you are well on your way to achieving significant financial goals by 2030.

Below, I will offer a detailed breakdown of your current investment strategy and provide an in-depth assessment to project where your portfolio could potentially reach by 2030. Additionally, I will share some insights on how you can maximise your investment returns while keeping your tax efficiency in mind.

Let’s explore the factors that will influence your future corpus.

1. Current Investment Strategy: A Strong Foundation
You are currently investing Rs 1,00,000 monthly through SIPs and an additional Rs 50,000 annually.

Your present SIP corpus stands at Rs 2 Crore, which shows your disciplined approach.

Continuing this strategy till 2030 will be highly beneficial, given the power of compounding over time.

The consistent monthly SIP ensures rupee cost averaging, reducing market volatility impact.

2. Estimated Growth of Your SIP Corpus by 2030
Assuming you continue with Rs 1,00,000 monthly SIP and Rs 50,000 annually, your investments will grow significantly.

The market’s historical average returns for equity mutual funds can range between 10% to 15% per annum. However, actual returns can vary due to market conditions.

Compounding will exponentially boost your returns, especially if you remain invested without withdrawals.

By 2030, your SIP portfolio can potentially cross Rs 6 Crore, given stable market conditions.

This estimate considers a conservative growth rate. However, equity markets have been known to outperform during bullish periods.

3. Active Fund Management: The Better Choice
Many investors lean towards index funds, but actively managed funds often outperform in the Indian context.

Active funds have skilled fund managers who adjust portfolios based on market dynamics.

They can exploit opportunities in specific sectors and stocks to generate alpha over benchmarks.

Index funds, while low-cost, are purely passive. They mirror indices without considering market trends.

Actively managed funds may have higher expense ratios, but the potential for superior returns justifies the cost.

Especially in volatile or uncertain markets, active fund management can make a substantial difference.

4. Investing Through a Mutual Fund Distributor (MFD)
Direct funds may seem cost-effective as they have lower expense ratios. However, they lack professional guidance.

Regular funds, managed through an MFD with a Certified Financial Planner (CFP) credential, offer holistic support.

An MFD can help you align your investments with your financial goals, provide tax planning, and adjust your portfolio as needed.

Regular reviews by an MFD ensure your portfolio is optimised for changing market conditions.

Direct funds require you to track performance, handle documentation, and monitor taxation—all on your own.

Engaging with a Certified Financial Planner through MFDs helps you focus on strategy, not execution.

5. Tax Implications: Managing Your Gains Efficiently
The recent tax changes impact equity mutual funds’ gains. Long-term capital gains (LTCG) over Rs 1.25 lakh are taxed at 12.5%.

Short-term gains (STCG) are taxed at 20%, while debt funds’ gains are taxed as per your income slab.

Efficient tax planning is crucial. Consult with your CFP to time redemptions and optimise tax liabilities.

Regular fund investments offer better tax management compared to direct funds, given the advisory support.

6. Market Volatility and Economic Factors
While investing in equity funds, market volatility is a reality. However, the long-term growth potential outweighs short-term fluctuations.

SIPs protect your investments from timing the market. Rupee cost averaging ensures that you buy more units when prices are low.

Focus on staying invested even during market downturns. History shows markets rebound, and long-term investors benefit the most.

With India's economic growth prospects, equity funds have the potential to deliver strong returns in the coming years.

7. Diversification and Portfolio Rebalancing
Continue diversifying within mutual funds to reduce concentration risk.

Allocate your SIPs across large-cap, mid-cap, and multi-cap funds for a balanced approach.

Rebalance your portfolio annually with your Certified Financial Planner to align with changing market conditions.

Consider thematic or sectoral funds cautiously, as they carry higher risks.

Reinvest dividends and gains to harness compounding benefits further.

8. Emergency Fund and Liquidity Considerations
Maintain a separate emergency fund to cover at least 6 months of expenses. This will prevent premature withdrawals from your SIPs.

Avoid liquidating your investments for short-term needs. Instead, use other sources like fixed deposits or liquid funds.

9. Aligning Investments with Financial Goals
Define clear goals, such as retirement planning, children’s education, or buying a property.

Each goal requires a tailored investment approach. For instance, retirement planning should focus on growth funds.

Engage with your Certified Financial Planner for goal-based investment planning.

Long-term SIPs work best when aligned with specific objectives, ensuring a disciplined approach.

10. Tracking and Monitoring Your Investments
Review your portfolio semi-annually to ensure it’s performing as expected.

Monitor fund performance and exit underperformers if needed, based on your Certified Financial Planner’s advice.

Keep an eye on changes in taxation rules and market regulations that could impact your returns.

Ensure your SIPs continue automatically. If cash flows change, adjust SIP amounts accordingly.

Finally: Staying Committed to Your Financial Journey
The journey to Rs 6 Crore or beyond is achievable with consistency.

Avoid impulsive decisions based on short-term market movements.

Keep your focus on the long-term horizon and stick to your investment plan.

Seek periodic advice from your Certified Financial Planner to stay on track.

The discipline and patience you’ve shown so far are commendable. Continue this momentum.

By following these strategies, your SIP investments can help you achieve significant financial milestones by 2030 and beyond.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |7322 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 08, 2024

Listen
Money
Hello I am of 43 and I have started in SIP of 35K per month. I want to continue till next 17 years and planning to increase this SIP by adding Rs 5000 to basic Rs 35K every year from now. My 5000 SIP is in Quant small fund and 30000 is in customized plan of MF. What would be the estimate corpus at the end of 60 years?
Ans: It's fantastic that you're taking proactive steps to build wealth for your future through systematic investment plans (SIPs). With your disciplined approach and long-term horizon, you're setting yourself up for financial security in your retirement years.

To estimate the corpus at the end of 60 years, we'll need to consider factors such as the rate of return on your investments, the annual increase in SIP contributions, and the compounding effect over time. While I won't provide specific calculations, I can offer some insights into how your investments may grow:

Rate of Return: The rate of return on your investments plays a significant role in determining the final corpus. Historically, equity mutual funds have delivered average annual returns of around 12-15% over the long term. However, past performance is not indicative of future results, so it's essential to consider a conservative estimate.
Annual Increase in SIP: By adding Rs 5,000 to your SIP every year, you're increasing your investment amount and harnessing the power of compounding. This incremental increase can significantly boost your corpus over time.
Investment Allocation: Your SIPs are divided between Quant Small Fund and a customized plan of mutual funds. The performance of these funds will also impact the final corpus. Ensure that your investment portfolio is well-diversified and aligned with your financial goals and risk tolerance.
By continuing your SIPs for the next 17 years and gradually increasing your contributions, you're leveraging the power of compounding to accumulate wealth over time. While it's challenging to provide an exact estimate without specific calculations, I encourage you to use online SIP calculators or consult with a Certified Financial Planner to get a more accurate projection based on your individual circumstances.

Remember, investing is a long-term journey, and staying disciplined and committed to your financial goals will ultimately lead to success. Keep up the excellent work, and don't hesitate to seek professional guidance if needed along the way.

..Read more

Ramalingam

Ramalingam Kalirajan  |7322 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 02, 2024

Asked by Anonymous - Jun 04, 2024Hindi
Money
I have outgoing sips of around 32000 per month in different mutual funds.. so far I have invested around 10 lakhs, the current value is 24lakh. What will my corpus be in the next 30 years
Ans: Planning for a long-term investment like a mutual fund SIP is a smart decision. You’ve shown great foresight by investing Rs 32,000 monthly and accumulating a substantial amount in your mutual funds. With Rs 10 lakhs already invested growing to a current value of Rs 24 lakhs, you’re off to a fantastic start. Now, let’s dive deep into what your corpus could look like in the next 30 years and how to strategically plan for that future.

Understanding the Growth of Your Investments
Your mutual fund investments have done remarkably well, growing from Rs 10 lakhs to Rs 24 lakhs. This is a clear indication that you’ve chosen your funds wisely. To estimate the future corpus, let’s analyze your investment strategy and growth prospects.

Historical Performance and Future Expectations
Your investments have shown substantial growth. Understanding the historical performance of your mutual funds can provide a good foundation for future expectations.

Growth So Far:

Initial Investment: Rs 10 lakhs.
Current Value: Rs 24 lakhs.
Growth Rate: Reflects a significant return over time.
Looking Forward:

Consistent SIPs: Continue investing Rs 32,000 monthly.
Long-Term Growth: Expect similar or slightly adjusted growth rates based on market conditions.
The Power of Compounding
Compounding is a powerful factor in long-term investing. It helps your money grow exponentially over time, especially when investing in growth-oriented mutual funds.

How Compounding Works:

Reinvestment of Returns: Returns generated are reinvested to generate additional returns.
Exponential Growth: Over time, this leads to exponential growth of your investments.
Long-Term Benefits: The longer the investment period, the greater the impact of compounding.
Estimating Your Future Corpus
While we won't use exact calculations here, understanding the potential growth can be motivating. Let’s consider some key points for your long-term investment horizon.

Factors Influencing Your Corpus:

Monthly SIP: Continuing Rs 32,000 monthly contributions.
Investment Horizon: A 30-year time frame provides ample opportunity for growth.
Expected Returns: Assuming a realistic annual return based on historical data of mutual funds.
Strategic Investment Planning
To ensure you reach your financial goals, it’s important to plan your investments strategically. Here’s how you can approach your SIP investments to maximize your corpus in the next 30 years.

Reviewing and Adjusting Your Portfolio
Regularly reviewing your mutual fund portfolio is crucial. This ensures that your investments remain aligned with your long-term goals and adapt to market changes.

Steps for Portfolio Review:

Annual Check-Up: Review your portfolio annually to assess performance.
Rebalance as Needed: Adjust allocations to maintain desired risk levels.
Monitor Fund Performance: Keep track of each fund’s performance relative to its benchmark.
Diversifying Your Investments
Diversification reduces risk by spreading investments across different asset classes and sectors. This helps in managing volatility and achieving consistent returns.

Benefits of Diversification:

Risk Mitigation: Reduces the impact of any single investment’s poor performance.
Consistent Growth: Balances potential high returns with safer investments.
Sector Exposure: Invest across various sectors to capture different growth opportunities.
Active Management vs. Index Funds
While index funds track market indices, actively managed funds aim to outperform through professional management. Actively managed funds often provide better returns and strategic flexibility.

Advantages of Actively Managed Funds:

Professional Expertise: Fund managers actively make decisions to maximize returns.
Potential for Outperformance: Can outperform market indices, especially in volatile markets.
Tactical Adjustments: Managers can adjust holdings to take advantage of market opportunities.
Disadvantages of Index Funds:

Lack of Flexibility: Passive strategy limits adaptability to market changes.
Average Returns: Typically provide market-average returns, not maximizing growth potential.
The Role of SIPs in Wealth Creation
Systematic Investment Plans (SIPs) are a disciplined way to invest regularly, regardless of market conditions. They help in averaging out the cost of investments over time.

Benefits of SIPs:

Rupee Cost Averaging: Invest a fixed amount regularly, averaging the purchase cost over time.
Discipline and Regularity: Encourages consistent investing habits.
Compounding Advantage: Regular investments leverage the power of compounding over time.
Avoiding Direct Funds for Better Guidance
Investing through a Mutual Fund Distributor (MFD) with Certified Financial Planner (CFP) credentials provides professional guidance. This helps in selecting funds that align with your goals and risk appetite.

Drawbacks of Direct Funds:

Lack of Professional Guidance: Requires you to make all investment decisions independently.
Potential for Misalignment: Investments may not align with your specific financial goals and risk tolerance.
Complexity and Time: Managing investments directly can be time-consuming and complex.
Advantages of Regular Funds via CFP:

Tailored Advice: Investments are customized based on your goals and financial situation.
Expertise and Experience: Benefit from the professional expertise of financial planners.
Simplified Management: CFPs manage and adjust your portfolio, saving you time and effort.
Planning for Future Financial Goals
Beyond growing your corpus, aligning your investments with future financial goals ensures that you are prepared for significant life events.

Planning for Children’s Education
Education costs are rising, and planning for your children’s higher education is crucial. Align part of your SIP investments with this goal.

Steps for Education Planning:

Estimate Future Costs: Project the future costs of your children’s education.
Dedicated Investments: Allocate specific investments for education.
Regular Reviews: Periodically review and adjust based on changing costs and requirements.
Securing a Comfortable Retirement
Retirement planning is essential to ensure financial independence in your later years. Consider the following strategies to secure a comfortable retirement.

Retirement Planning Steps:

Determine Retirement Needs: Estimate your retirement expenses and desired lifestyle.
Build a Corpus: Use your SIP investments to grow a retirement corpus.
Diversify and Rebalance: Ensure a diversified portfolio and adjust as you approach retirement.
Managing Unexpected Expenses
Life can throw unexpected financial challenges. Having a portion of your investments liquid and easily accessible helps in managing these emergencies.

Emergency Fund Strategy:

Maintain Liquidity: Keep part of your investments in liquid or easily accessible funds.
Replenish Regularly: Refill your emergency fund after using it.
Align with Goals: Ensure it aligns with your broader financial strategy.
Monitoring and Adjusting Your Financial Plan
A financial plan is not static; it evolves with changing goals, market conditions, and life events. Regular monitoring and adjustments keep you on track.

Regular Portfolio Reviews
Conducting regular portfolio reviews ensures that your investments remain aligned with your goals and performance expectations.

Portfolio Review Process:

Set Review Schedule: Establish a schedule for reviewing your portfolio, ideally annually.
Evaluate Performance: Compare each fund’s performance against its benchmark and peers.
Make Necessary Adjustments: Rebalance your portfolio to maintain the desired asset allocation.
Staying Informed and Updated
Keep yourself informed about market trends, new investment opportunities, and changes in financial regulations. This helps in making informed decisions.

Keeping Informed:

Read Financial News: Stay updated with financial news and market trends.
Consult Your CFP: Regularly discuss your portfolio and strategy with your Certified Financial Planner.
Continuous Learning: Enhance your financial literacy to better understand your investments.
Adapting to Life Changes
Significant life events like marriage, children’s education, or career changes require adjustments to your financial plan. Adapt your investments to align with these changes.

Adapting to Changes:

Life Events: Adjust your plan for events like marriage, children’s education, or job changes.
Review Goals: Reassess your financial goals periodically and adjust your investments accordingly.
Flexible Planning: Maintain flexibility in your plan to accommodate unexpected changes.
Final Insights
You’re on a great path with your current SIPs and accumulated wealth. By continuing your disciplined investing, diversifying wisely, and regularly reviewing your portfolio, you’re well-positioned to build a substantial corpus over the next 30 years. Stay focused on your financial goals, keep educating yourself, and seek professional guidance when needed. Your proactive approach today will pave the way for a secure and prosperous future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7322 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 15, 2024

Asked by Anonymous - Jul 03, 2024Hindi
Money
I am investing 39000 per month in sip from last 1 year and i am investing in sip since 2016 started with rs 5000 and increase the amount year by year. I will continue for more 20 years with 39000 per month in sip . How much corpus i can expect after 20 years ?
Ans: Investing in Systematic Investment Plans (SIPs) is a smart choice. It shows a disciplined approach towards achieving long-term financial goals. Given your commitment to investing Rs 39,000 per month for the next 20 years, let's explore the potential growth of your corpus.

Understanding SIPs
Systematic Investment Plans (SIPs) are a methodical way to invest in mutual funds. They offer the convenience of investing small amounts regularly, which can accumulate into a substantial corpus over time.

The Power of Compounding
One of the biggest advantages of SIPs is the power of compounding. This means the returns you earn on your investments start generating their own returns. Over a long period, this can lead to exponential growth in your investment value.

Rupee Cost Averaging
SIPs also benefit from rupee cost averaging. When markets are down, you buy more units at a lower price, and when markets are up, you buy fewer units at a higher price. This averages out the cost of your investments over time, reducing the impact of market volatility.

Your Investment Journey So Far
You started investing Rs 5,000 per month in 2016 and have increased your SIP contributions each year. This demonstrates a strong commitment to your financial goals and an understanding of the importance of increasing investments as your income grows.

Current Investment Scenario
Since last year, you have been investing Rs 39,000 per month. Assuming you continue this for the next 20 years, let's explore what you can expect in terms of your investment corpus.

Growth Projections
Predicting the exact future value of your investments involves assumptions about the average annual return rate. Historically, equity mutual funds in India have delivered returns between 12-15% per annum. For our discussion, we will consider a conservative average annual return of 12%.

Yearly Breakdown
Initial Year: In the first year, you invested Rs 5,000 per month. By the end of the year, you had invested Rs 60,000.

Subsequent Increases: Each year, you increased your SIP contributions. This progressive approach significantly boosts your corpus over time.

Current Contributions: Now, you are investing Rs 39,000 per month. This consistency and increase in contribution amount will compound significantly over the next 20 years.

Estimated Corpus After 20 Years
Without going into specific calculations, it is reasonable to expect that with a consistent investment of Rs 39,000 per month and assuming a 12% annual return, your corpus could grow substantially.

Evaluating the Investment Strategy
Discipline and Consistency
Your disciplined approach to SIPs is commendable. Regular investing, regardless of market conditions, helps in building a substantial corpus. It also instills a habit of saving and investing, which is crucial for long-term wealth creation.

Increasing SIP Amounts
Gradually increasing your SIP amounts shows a proactive approach. It helps in aligning your investments with your growing financial capacity. This strategy ensures that your investments grow in proportion to your income.

Long-Term Horizon
A 20-year investment horizon is ideal for SIPs. It allows your investments to go through multiple market cycles. Over the long term, markets generally trend upwards, providing good returns for disciplined investors.

Diversification
It is important to ensure that your SIPs are well-diversified. Investing in a mix of large-cap, mid-cap, and small-cap funds can help in managing risk while aiming for good returns. Diversification reduces the impact of poor performance of any single asset class on your overall portfolio.

Potential Challenges
Market Volatility
While SIPs help in mitigating the impact of market volatility, it is important to be mentally prepared for market fluctuations. Staying invested during market downturns can be challenging but is crucial for long-term success.

Inflation
Inflation can erode the real value of your returns. It is important to ensure that your investments are growing at a rate higher than inflation to maintain your purchasing power.

Review and Rebalance
Regularly reviewing and rebalancing your portfolio is essential. This ensures that your investments are aligned with your financial goals and risk appetite. Consulting with a Certified Financial Planner can help in making informed decisions.

Appreciating Your Efforts
Your dedication to investing and increasing your SIP contributions is truly commendable. It shows a clear understanding of the importance of long-term investing and the discipline required to achieve financial goals.

Staying Committed
Staying committed to your investment plan is key. It is easy to get swayed by short-term market movements, but a long-term perspective is crucial for wealth creation.

Seeking Professional Guidance
While you have demonstrated a good understanding of SIPs and investing, seeking advice from a Certified Financial Planner can provide additional insights. They can help you tailor your investment strategy to your specific financial goals and risk profile.

Final Insights
Investing Rs 39,000 per month in SIPs for the next 20 years can potentially lead to substantial wealth creation. Your disciplined approach and commitment to increasing your investments are key factors in achieving your financial goals.

Continuous Learning
Stay updated with market trends and continue learning about investments. This will help you make informed decisions and adapt to changing market conditions.

Financial Goals
Clearly define your financial goals and align your investments accordingly. Whether it is for retirement, children's education, or buying a house, having clear goals helps in planning and staying motivated.

Enjoy the Journey
Investing is a journey. Enjoy the process and stay focused on your goals. Celebrate the small milestones and stay committed to your long-term plan.

Your dedication to SIPs is setting you on the path to financial independence. Keep up the good work, and you will reap the rewards of your disciplined investing.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Dr Ashish

Dr Ashish Sehgal  |115 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Dec 23, 2024

Listen
Relationship
Sir as I previously take your view about my situation...sir you tell that in love understanding between partner is important.but sir my partner doesn't want to talk with me.I just never think that he will give up so easily.
Ans: It’s interesting, isn’t it, how relationships often mirror the patterns of communication we create within them? When one partner feels distant or unwilling to talk, it’s less about them giving up and more about a shift in the way they’ve been feeling understood—or misunderstood.

You see, communication isn’t just about words; it’s about emotions, intentions, and the unspoken messages we convey. If your partner isn’t talking, perhaps they’re saying something without words. And that’s where curiosity becomes your ally.

Instead of focusing on the silence, what if you shifted your attention to understanding what that silence represents? Maybe it’s disappointment, frustration, or even fear. But the key is, you can’t solve what you assume—it’s about discovering what’s really there.

And let me ask you this: if you were to step into their shoes for a moment—just imagine being them—what might they feel? What might they need to hear from you, or perhaps sense from your presence, that could bring a spark of connection back into the conversation?

Love is rarely about giving up. It’s about learning to communicate in a way that feels safe and understood. And if you’re willing to stay open, willing to listen to the quiet messages, you may find a new way forward—one step at a time.

...Read more

Ramalingam

Ramalingam Kalirajan  |7322 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 23, 2024

Listen
Money
Hi Mr. Ramalingam, Can I check New Asset class (Specialized Investment Fund SIF) for 10 lakhs investment for my kids education(Right now 4months old). Thank you for your response.
Ans: Investing Rs 10 lakhs for your child’s education is a thoughtful decision.

Your child is 4 months old, so you have a long investment horizon.

Currently, SIF is not yet launched or operational.

Equity Mutual Funds: A Reliable Option
Equity mutual funds are proven for long-term goals like education.

They offer inflation-beating growth over a 15-18 year period.

Start investing now to benefit from compounding.

Choose funds with a consistent track record.

Wait and Observe SIF Performance
SIF is a new asset class and lacks a performance track record.

It’s wise to wait for its launch and review its stability.

Assess the fund's returns, risk profile, and management quality.

Investing in an untested asset could increase risks unnecessarily.

Diversify Investments Over Time
Initially, focus on equity mutual funds for growth.

Later, as SIF stabilises and performs well, consider it.

Diversify across asset classes gradually based on market insights.

Final Insights
Begin with equity mutual funds for your child’s education fund.

Monitor SIF's launch and performance over the next few years.

Decide on SIF only after it demonstrates a solid track record.

Keep your investments aligned with your long-term goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Milind

Milind Vadjikar  |790 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Dec 23, 2024

Listen
Money
I& my wife is 32. What would our ideally retirement corps. I assume 20Cr. Correct me if I'm wrong. My current saving & income are below - 1) Rs 2,40,000 take home per month combined. 2) We both have PPF for the last 7 years contributing 1.5L each year from starting and plans to continue till 60. 3) LIC will give us 2Cr when we hit 60. 4) NPS we contribute 1L per each year form 2022 combined plans continue till 60. 5) Mutual Fund of SIP Rs 10,000 each month for last 1 year combined plans continue till 60. 6) APY we will get 5000 per month at 60. 7) FDs of Rs 36Lakh 8) Gold of Rs 15Lakh bonds 9) Got Inherited Rs 1.6Cr in form of FDs 10) Have Medeclaim of 40Lakhs and have own house. 11) Monthly expenses is around 40,000. 12) Have 1 year old Kid. 13) Have PF of 8 lakhs and will grow till 60. Also taking Gratuity in account.
Ans: Hello;

Your current monthly income need of 2.4 L will grow up to 12.27 L after 28 years (At your retirement age of 60) considering 6% inflation.

Assuming your expenses at retirement will reduce so you may need 75% of this income to cover your expenses at that time therefore you may need a monthly income of 9.2 L.

To generate this income you may need a corpus of 27 Cr(Min.) at the age 60 that may generate post-tax monthly income of around 9.2 L.

Your investments will grow as follows,

1. PPF: 1.5 L per person per year for 35 years will grow into a corpus of around 4.32 Cr. (6.9% return assumed)

2. LIC: policy maturity proceeds will provide 2 Cr at age 60.

3. NPS: 1 L per person per year may grow into a sum of 2.5 Cr at 60.(8% return considered)

4. MF sip of 10 K may grow into a sum of 2.05 Cr at 60. (10% return considered)

5. FD of 36 L will grow into a sum of 2.1 Cr if held till 60. (6.5% return assumed)

6. Gold in form of bonds if reinvested into gold mutual funds and held till 60 may yield a corpus of around 1.1 Cr. (7% return assumed)

7. Inherited funds if held in FD till the age of 60 may yield a corpus of 9.9 Cr.
(6.5% return considered)

8. EPF is expected to grow into a sum of around 1.8 Cr at the age of 60.(7% return considered)

A summation of investment values at 60 indicates a sum of around 25.77 Cr thereby hinting at a gap of around 1.23 Cr.

You may begin another monthly sip of 7 K now which may grow into a sum of around 1.3 Cr by 60 age.(10% return assumed)

If the mediclaim policy is from employer, do buy a personal health care cover after 50-55 for your family for post retirement needs.

I presume you both have adequate term life insurance cover apart from LIC policy.

The financial goal for your kid's education and family expansion, if any, is not factored here. You may need to plan for it suitably.

Also it appears that your allocation to equity is quite low, may be due to limited risk appetite but you have time on your side and although short to medium term(5-7 yr) equity asset class may be impacted due to volatility but over a long-term(10 yr+) they have demonstrated good inflation adjusted returns so may be you may consider to increase allocation through hybrid funds suiting your risk appetite.

Happy Investing;
X: @mars_invest

...Read more

Ramalingam

Ramalingam Kalirajan  |7322 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 23, 2024

Listen
Money
Meri family ki income 80 lakhs hai yearly aur 40 lakhs expense hai aur age meri 48 hai capital family ki 4 cr hai to unko kaise manage aur kaha invest kare
Ans: Current Financial Snapshot
Annual Income: Rs 80 lakhs
Annual Expenses: Rs 40 lakhs
Capital Available: Rs 4 crores
Age: 48 years
Your income and existing capital provide a strong foundation. With proper planning, you can secure your financial future and achieve your goals.

Key Financial Goals
Retirement Planning: Build a corpus to sustain your post-retirement lifestyle.
Wealth Growth: Invest capital for inflation-beating returns.
Risk Management: Ensure adequate insurance coverage for family security.
Tax Efficiency: Optimise investments to reduce tax liabilities.
Suggested Investment Allocation
1. Emergency Fund
Maintain 6-12 months of expenses (Rs 20-40 lakhs) in liquid funds or a high-interest savings account.
This ensures liquidity for any unforeseen circumstances.
2. Equity Mutual Funds
Allocate 50-60% of your capital (around Rs 2-2.4 crores) to equity mutual funds.
Use diversified funds like large-cap, flexi-cap, and mid-cap funds for growth.
Avoid index funds due to lack of flexibility and active management.
Invest monthly through systematic investment plans (SIPs) for disciplined investing.
3. Debt Investments
Invest 20-25% of your capital (Rs 80 lakhs-1 crore) in debt mutual funds or fixed-income instruments.
Choose funds with low risk to ensure stability and predictable returns.
These funds act as a safety net during market downturns.
4. Children’s Education or Marriage
Allocate funds for long-term goals like education or marriage.
Invest in balanced advantage funds or equity mutual funds for higher returns.
5. Retirement Planning
At 48, focus on building a retirement corpus.
Allocate 20% of your capital (Rs 80 lakhs) to retirement-specific investments.
Use a mix of equity and debt for growth and safety.
Risk Management
Life Insurance
Ensure you have a term insurance cover of at least Rs 2-3 crore.
This protects your family’s financial future in your absence.
Health Insurance
Take a family floater health insurance plan of Rs 25-30 lakh.
Include critical illness coverage to address rising healthcare costs.
Tax Efficiency
Maximise Section 80C benefits by investing in ELSS mutual funds or PPF.
Use NPS for additional tax deductions under Section 80CCD.
Invest in tax-efficient instruments to reduce liabilities.
Regular Monitoring
Review your investments every six months with a Certified Financial Planner.
Rebalance your portfolio to align with market trends and life changes.
Final Insights
You have a strong financial base with high income and significant capital.

With disciplined investing, risk management, and tax efficiency, you can grow your wealth and achieve your goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x