Hi Sir. I'm 31 years old with a monthly income of 90000. Among that I invest 20000 in ppf and I have several monthly SIPs (Rs 500 each) totaling to Rs. 10000 like Bharat Bonds, HDFC multi cap, Mirai Asset Tax Saver, Nippon India Arbitrage, Quant ELSS, SBI liquid, Parag Parikh Flexi Cap etc. Is it possible to get a monthly return of at least Rs. 30000 from my investments after I turn 60?

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: Thank you for sharing your financial journey and goals. Let’s create a plan to help you achieve a monthly income of Rs 2 lakhs after the age of 60 and accumulate a substantial retirement corpus.

1. Current Financial Situation and Goals
You are currently 49 years old and have been investing in SIPs since 2019. Your current SIP investment is Rs 20,000 per month. You recently invested Rs 10 lakhs in four equity-linked mutual funds, with 50% in a liquid fund for six months. You expect Rs 43 lakhs from your PPF by 2031.

Your primary goals are:

Achieving a monthly income of Rs 2 lakhs after 60.
Accumulating a substantial retirement corpus for a comfortable life post-retirement.
2. Analyzing Your Investments
SIP Investments
SIP investments are a great way to build a corpus over time. With Rs 20,000 per month, you are already on the right path. SIPs help in averaging out market volatility and building wealth over the long term.

Lump Sum Investment
You have invested Rs 10 lakhs in equity mutual funds, with half in a liquid fund. This strategy provides growth potential while ensuring liquidity for short-term needs.

PPF
Your PPF account is expected to yield Rs 43 lakhs by 2031. PPF is a safe investment with tax-free returns, which is excellent for long-term goals.

3. Creating a Retirement Corpus
Calculate the Required Corpus
To achieve a monthly income of Rs 2 lakhs post-retirement, you need to calculate the required retirement corpus. Assuming a life expectancy of 85 years and a withdrawal rate of 4%, you will need approximately Rs 6 crores at the age of 60.

Asset Allocation
Diversification across asset classes is crucial. Here’s a recommended asset allocation:

High-Risk Investments
Equity Mutual Funds: Continue investing in equity mutual funds for long-term growth. Increase your SIP amount annually by 10% to boost your corpus.
Medium-Risk Investments
Balanced Mutual Funds: These funds offer a mix of equity and debt, providing balanced growth with moderate risk.

Corporate Bonds: Invest in high-rated corporate bonds for steady returns with moderate risk.

Low-Risk Investments
Debt Mutual Funds: Invest in debt mutual funds for stable returns and lower risk.

Fixed Deposits and PPF: Continue investing in PPF for safe, tax-free returns. Consider fixed deposits for short-term needs.

4. Generating Monthly Income Post-Retirement
Systematic Withdrawal Plan (SWP)
An SWP allows you to withdraw a fixed amount from your mutual fund investments regularly. This provides a steady income while keeping your principal invested for growth.

Dividend-Paying Mutual Funds
Invest in mutual funds that offer regular dividends. This provides an additional income stream.

Interest from Debt Investments
Interest from fixed deposits, corporate bonds, and debt mutual funds can provide a stable income post-retirement.

5. Additional Considerations
Emergency Fund
Maintain an emergency fund equivalent to 6-12 months of your expenses. This should be easily accessible and invested in liquid instruments like savings accounts or liquid mutual funds.

Tax Planning
Opt for tax-efficient investments to minimize your tax liability. ELSS funds offer tax benefits under Section 80C, while PPF provides tax-free returns.

Regular Portfolio Review
Review your portfolio annually to ensure it remains aligned with your goals and risk tolerance. Rebalance your portfolio as needed to maintain the desired asset allocation.

6. Steps to Achieve Your Goals
Increase SIP Investments: Gradually increase your SIP amount by 10% annually to build a larger corpus.

Diversify Investments: Allocate your investments across equity, balanced, and debt mutual funds for diversification.

Invest Lump Sums Wisely: When you have additional funds, invest them in a mix of equity and debt instruments.

Utilize PPF Wisely: Continue contributing to PPF for safe, tax-free returns.

Plan for Monthly Income: Use SWPs, dividend-paying funds, and interest from debt investments to generate a steady post-retirement income.

Maintain an Emergency Fund: Ensure you have sufficient liquidity to handle emergencies without disrupting your investment strategy.

Tax Planning: Invest in tax-efficient instruments and utilize tax benefits to optimize your returns.

Regular Reviews: Review and rebalance your portfolio annually to stay on track with your goals.

Conclusion
You are on a commendable path towards building a substantial retirement corpus. By increasing your SIP investments, diversifying your portfolio, and planning for a steady post-retirement income, you can achieve your financial goals. Regularly review your portfolio and make adjustments as needed to stay aligned with your objectives.

Investing wisely today will secure your financial future and ensure a comfortable and fulfilling retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Assessing Your Retirement Goal
Introduction
It's great to see your commitment to building a strong financial future. At 31, with disciplined investments, achieving your retirement goal by 45 is within reach.

Current Investments
Your current investment strategy is diversified and solid:

SIP: ?48,000 per month
PPF: ?1.5 lakh per year
NPS: ?96,000 per year
Existing Portfolio: ?31 lakh
This diversified approach provides a good mix of equity and debt.

Retirement Goal
You aim to retire at 45 with a monthly income of ?1.25 lakh. Let’s evaluate if this is achievable.

SIP Investments
Investing ?48,000 per month in SIPs is excellent. Assuming a conservative annual return of 12%, this can grow substantially over the next 14 years.

PPF Contributions
PPF is a safe and tax-efficient investment. The annual contribution of ?1.5 lakh, assuming an interest rate of 7.1%, will grow steadily.

NPS Contributions
NPS offers a good mix of equity and debt with additional tax benefits. An annual contribution of ?96,000, assuming a moderate return of 10%, will also grow well over time.

Total Investment Growth
Combining SIPs, PPF, and NPS contributions with your existing portfolio, let’s project the growth over 14 years. Regular investments and compounding will significantly boost your corpus.

Estimating Retirement Corpus
SIP Growth: ?48,000 monthly SIP for 14 years at 12% returns.
PPF Growth: ?1.5 lakh yearly for 14 years at 7.1% returns.
NPS Growth: ?96,000 yearly for 14 years at 10% returns.
Existing Portfolio Growth: ?31 lakh growing at an average of 10%.
Combining these, your total corpus should be substantial. Detailed calculations by a CFP can provide precise figures.

Income from Corpus
To generate ?1.25 lakh monthly, or ?15 lakh annually, you need a significant corpus. Assuming a 4% safe withdrawal rate, the required corpus is approximately ?3.75 crore.

Achievability
With disciplined investments, reaching a corpus close to ?3.75 crore is achievable. Regular reviews and adjustments can ensure you stay on track.

Recommendations
Continue SIPs: Stick with your ?48,000 monthly SIPs.
Maximize PPF Contributions: Keep contributing ?1.5 lakh annually.
Regular NPS Contributions: Continue contributing ?96,000 annually.
Portfolio Review: Regularly review and rebalance your portfolio with a CFP.
Professional Advice
Consulting a Certified Financial Planner (CFP) can provide tailored advice and help optimize your investments. They can help with tax planning, fund selection, and retirement strategies.

Conclusion
Your disciplined approach and diversified investments set a strong foundation for your retirement goal. With regular reviews and adjustments, achieving your desired monthly income by 45 is within reach.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in