Hello,
I am 24 years old and would like to retire by 40 years of age. I have no loans/debts and I am earning 65k per month. My personal expenses would be around 30k. Kindly let me know how much should I invest in SIP monthly so that I can manage my expenses at the age of 40. As per my observation, physical gold investment is increasing day by day. So, could continous SIP beat gold investment? Also, I am planning to invest in buying a plot/land. But, I guess I am too young to invest in it and pay EMIs. I would like to know if I should rather invest in SIP or gold. Please let me know if SIP can beat gold periodically and if buying house/plot in EMIs is beneficial for future. And I would like to retire at 40 years. Kindly let me know how much should I invest in order to do swp of atleast 60k ( in today's worth) at that time.
Ans: You are 24 now.
You want to retire at 40.
That gives you 16 years to build wealth.
You are earning Rs 65,000 per month.
You spend Rs 30,000. You save the rest.
No loans. That is a great start.
Early retirement is possible with strong financial habits.
But it needs high savings, discipline, and right investment choices.
Let us build your roadmap step by step.
Monthly Surplus Is the Key Strength
You spend Rs 30,000 monthly.
That means you can save Rs 35,000 per month.
This is a very strong surplus at your age.
If you invest this smartly, you can reach financial freedom.
You must focus on:
High-quality mutual fund SIPs
Strong emergency fund
Term insurance and health insurance
Avoiding debt-based assets like property
Avoiding gold as a major investment
Let us plan your money smartly.
Emergency Fund Comes First
You must have emergency money for six months of expenses.
Your expenses are Rs 30,000 monthly.
So target Rs 1.8 lakhs in an emergency fund.
Keep this in a savings-linked RD or liquid fund.
Do not put emergency money in gold or SIPs.
It must be liquid and safe.
Start saving Rs 5,000 monthly till you reach Rs 1.8 lakhs.
After that, stop and shift focus to long-term investments.
Insurance Is Not Optional
You are young and healthy.
But life and health cover is still necessary.
Buy a pure term plan with Rs 50 lakhs cover.
This is cheap and protects your dependents.
Avoid any LIC or ULIP or endowment plans.
Also take a personal health cover of Rs 5 lakhs.
Do not depend only on employer health policy.
If you change jobs, that cover will go away.
Both these insurances are part of financial freedom.
They protect your future wealth from damage.
Mutual Fund SIPs Are the Main Engine
You want to do SWP of Rs 60,000 per month after 40.
In today’s money, Rs 60,000 will be more in future due to inflation.
You need a large corpus by 40.
You must invest regularly in mutual funds from now.
Start with Rs 30,000 per month in mutual fund SIPs.
Split this SIP into 3 to 4 good funds only:
One flexi-cap
One mid-cap
One hybrid aggressive
One ELSS or small-cap
Avoid index funds.
Index funds copy the market. They fall fully in crash.
They do not have a fund manager to protect you.
Actively managed funds adjust portfolios.
They can avoid weak sectors.
That is why Certified Financial Planners prefer active funds.
You also get fund strategy, sector analysis, and rebalancing.
Avoid direct mutual funds if you are not an expert.
Direct funds need you to do all fund selection and rebalancing.
You may make wrong switches or miss the timing.
Instead, use regular plans via MFD working with CFP.
You get tracking, updates, and advice when market changes.
SIP is your growth tool.
Start with Rs 30,000 now. Increase it every year with salary hike.
If you get bonus, invest it as lump sum in same funds.
Can SIP Beat Gold? Absolutely Yes
Gold is emotional for Indians.
But for wealth building, gold is not ideal.
Gold gives 5-8% return on average.
Sometimes 10%. But with long flat periods.
Also, gold gives no income. You cannot get monthly returns from it.
Mutual funds give better returns.
Equity funds grow wealth faster.
They also give tax-efficient returns.
You can do SWP in mutual funds.
You cannot do monthly withdrawal from gold.
Also remember:
Gold returns are volatile
Gold is taxed as per slab when sold
Gold has making charges, storage issues
SIP in equity funds beats gold over 10-15 years.
Gold can be 5% of your portfolio. But not more.
If you want to invest in gold, do it only for diversification.
Not for long-term wealth.
Avoid Buying Land or Plot Now
You want to buy land. But that is not wise now.
You are 24. You want to retire by 40.
Land investment will create EMI.
It will reduce your SIP power.
Also land gives no monthly income.
Land price may not grow fast.
You will also pay stamp duty, taxes, and registration charges.
No tax benefit unless you build house and live there.
Plot is an illiquid asset.
You cannot sell part of it in need.
EMI on land will lock your income for 10–15 years.
That will delay your financial freedom.
Avoid this mistake.
Focus on liquid, flexible, and growing investments.
Mutual funds are best suited for this.
Build corpus first. Then decide about house later.
Rent if needed. But do not block money into land.
How Much Corpus Do You Need at 40?
You want Rs 60,000 monthly after retirement.
At age 40, your needs will be more due to inflation.
Rs 60,000 today will become more in future.
Assume Rs 1 lakh per month is needed in future value.
So you need a retirement corpus that can give Rs 1 lakh monthly.
That is Rs 12 lakhs per year.
You need corpus of Rs 2.5 to 3 crore minimum by age 40.
This corpus will generate income using SWP.
You can do monthly withdrawal from mutual funds after retirement.
You can use hybrid funds or balanced advantage funds post-40.
They give stable returns and lower volatility.
To build Rs 3 crore in 16 years, you need to invest:
Rs 30,000 monthly SIP now
Step up SIP by 10% every year
Invest bonuses and incentives also
Stay invested for full 16 years
Do not withdraw midway
Rebalance funds every year
Avoid new risky ideas or fancy stocks
You need discipline more than high returns.
How to Use SWP After Age 40
At 40, stop SIPs.
Start SWP from same mutual fund corpus.
Withdraw Rs 1 lakh monthly using SWP.
Plan the SWP like this:
Use hybrid funds for less risk
Keep 2 years’ income in debt fund
Keep 3 to 4 years’ income in hybrid fund
Keep rest in flexi-cap fund
This mix will give you stability and growth.
Meet your Certified Financial Planner every year.
Rebalance based on return and market.
Don’t try to pick funds yourself.
Get help from MFD backed by CFP.
They guide you based on age and need.
Tax Planning Is Important Too
When you withdraw SWP, taxes will apply.
Mutual fund capital gains have new rules now.
For equity funds:
LTCG above Rs 1.25 lakh is taxed at 12.5%
STCG is taxed at 20%
For debt funds:
Gains are taxed as per your income slab
You must plan redemptions in tax-efficient way.
This will protect your post-retirement income.
Don’t exit large amount in one shot.
Use SWP route. Take monthly amount.
It spreads your capital gains over many years.
Your Yearly Plan of Action
Every year, do this:
Increase SIP by 10% with salary hike
Review fund performance with MFD and CFP
Rebalance your equity and debt mix
Avoid stopping SIPs for short-term goals
Avoid switching funds unless required
Keep gold allocation to less than 5%
Avoid real estate unless you have surplus
Track your net worth every 6 months
This gives you full control over your future.
Avoid These Common Mistakes
Don’t buy land or plot using EMI
Don’t go for index funds
Don’t invest in direct funds without expert
Don’t depend on gold returns
Don’t ignore insurance needs
Don’t miss SIP even one month
Don’t use retirement fund for short-term goals
Don’t take loans for investment purpose
Finally
You have time, energy, and savings power.
Use all three wisely from today.
Focus on SIPs in quality mutual funds
Avoid land, gold, and risky ideas
Build emergency fund and insurance
Invest Rs 30,000 monthly from now
Aim for Rs 3 crore corpus by age 40
Use SWP to get monthly income after 40
Retiring at 40 is possible.
But it needs full commitment and zero distractions.
Start now. Stay consistent.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Question by Gaurav on May 18, 2024Hindi
