Hi , present age is 32 , I have 1 lakh as monthly income and investing 1.5 lakh yearly in ppf and 50000 in nps have a mutual fund of 6000 monthly and 30000 monthly in rd. What should be my investment value and where I should invest for having a corpus of 2 cr by retirement.

Ans: Current Investment Analysis

Your current investments are in PPF, NPS, mutual funds, and recurring deposits (RD). You are earning Rs 1 lakh monthly. Let’s assess your investments and provide a strategy to achieve a Rs 2 crore corpus by retirement.

Public Provident Fund (PPF)

You are investing Rs 1.5 lakh yearly in PPF. PPF offers tax-free returns with low risk. The current interest rate is around 7-8%. Continue with this for stable returns and tax benefits.

National Pension System (NPS)

You are investing Rs 50,000 yearly in NPS. NPS provides tax benefits and helps build a retirement corpus. It offers moderate returns and is a good long-term investment. Continue with this investment.

Mutual Funds

You are investing Rs 6,000 monthly in mutual funds. Mutual funds can provide higher returns. Diversify your mutual fund investments across large-cap, mid-cap, and multi-cap funds. This reduces risk and enhances growth potential.

Recurring Deposits (RD)

You are investing Rs 30,000 monthly in RDs. RDs offer safe and fixed returns but are not tax-efficient. Consider reducing your RD contributions and increasing your investments in mutual funds for better returns.

Investment Strategy for Rs 2 Crore Corpus

To achieve a Rs 2 crore corpus by retirement, follow a diversified investment approach.

Increase Equity Exposure

Increase your investment in equity mutual funds. Allocate a significant portion of your monthly savings here. Equity funds can provide 10-15% annual returns. This will help you reach your goal faster.

Systematic Investment Plan (SIP)

Start a SIP for consistent investments in mutual funds. SIPs help in averaging out market volatility. Increase your SIP amount as your income grows. Consider allocating Rs 20,000 to Rs 30,000 monthly to equity mutual funds.

Balanced Funds

Invest in balanced funds for a mix of equity and debt. These funds offer moderate returns with controlled risk. Allocate around 20% of your portfolio to balanced funds. This provides stability and growth.

Debt Funds

Invest in debt funds for stable returns and lower risk. Allocate around 10-15% of your portfolio to debt funds. This ensures some stability in your investments.

Review and Rebalance

Review your portfolio every six months. Rebalance your investments to align with your goals. Adjust your allocations based on market conditions and performance.

Tax Efficiency

Invest in tax-efficient instruments to maximize returns. Equity mutual funds offer tax benefits with long-term capital gains up to Rs 1 lakh per year being tax-free. NPS also provides additional tax benefits under Section 80CCD(1B).

Insurance Review

Ensure you have adequate life and health insurance. Consider term insurance for life cover and a good health insurance plan. This safeguards your family’s financial future.

Final Insights

To achieve a Rs 2 crore corpus by retirement, diversify wisely. Increase your investments in equity mutual funds for higher returns. Balance your portfolio with debt and balanced funds. Review and rebalance your portfolio regularly. Ensure you have adequate insurance coverage. Work with a Certified Financial Planner (CFP) for professional guidance.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in