I and my wife are aged 63. Our monthly expense is about Rs 2.5 Lakhs. What is a safe Corpus we should be having now, assuming a further life of 20 years? Currently our money is parked in FD/MF/SIP/Equity/Pension Funds

Ans: You and your wife are currently 63 years old. At this stage in life, it's essential to have a clear financial plan that ensures you can comfortably meet your monthly expenses of Rs 2.5 lakhs. With a further life expectancy of 20 years, a well-structured financial corpus is crucial.

Your money is currently parked in fixed deposits, mutual funds, systematic investment plans, equities, and pension funds. These investment avenues can offer varied returns and risks. Let's explore how to create a safe and sustainable corpus for your needs.

Evaluating Monthly Expenses and Inflation
Given your monthly expenses of Rs 2.5 lakhs, it's essential to account for inflation. Assuming an average inflation rate of 6%, your expenses will increase over time. This will significantly impact your corpus requirement.

To ensure you don't run out of money, your corpus should not only cover your current expenses but also accommodate future inflation. This approach helps in maintaining your purchasing power throughout your retirement years.

Assessing Investment Avenues
Fixed Deposits (FDs)
Fixed deposits are a safe investment option, offering guaranteed returns. However, the returns from FDs are usually lower than inflation. This can erode the purchasing power of your corpus over time.

Mutual Funds (MFs) and SIPs
Mutual funds and systematic investment plans (SIPs) provide diversified exposure to equities and bonds. Actively managed funds have the potential to outperform index funds by leveraging the expertise of fund managers. However, it's important to choose funds wisely, considering their past performance, fund manager's experience, and expense ratios.

Equities
Equities can offer higher returns but come with higher risk. At your age, it's crucial to balance the equity exposure to ensure safety. A moderate allocation to equities can help in achieving growth while minimizing risks.

Pension Funds
Pension funds provide a steady income post-retirement. They are usually conservative, focusing on preserving capital and generating stable returns. It's important to review the payout options and ensure they align with your income needs.

Creating a Safe Corpus
Diversification
Diversification is key to creating a safe and sustainable corpus. Spreading investments across different asset classes reduces risk and ensures stability. A well-diversified portfolio can include a mix of fixed deposits, mutual funds, equities, and pension funds.

Regular Funds vs. Direct Funds
Investing through a Certified Financial Planner (CFP) via regular funds can offer several advantages over direct funds. A CFP can provide personalized advice, helping you choose the best investment options. Regular funds also come with professional management, which can be beneficial in navigating market volatility. While direct funds have lower expense ratios, the guidance and expertise provided by a CFP can outweigh the cost difference.

Avoiding Index Funds
Index funds mimic market indices and usually have lower costs. However, they lack the ability to outperform the market. Actively managed funds, on the other hand, can leverage market opportunities to generate higher returns. Given your need for a robust corpus, actively managed funds can be a better option.

Calculating the Required Corpus
While we won't delve into specific calculations, it's important to understand the approach. Your corpus should cover your current and future expenses, considering inflation. Additionally, it should factor in emergencies and unforeseen expenses.

A rule of thumb is to have a corpus that can sustain your lifestyle for 25-30 years, accounting for inflation. This conservative approach ensures that even if you live longer than expected, your financial needs are met.

Generating Regular Income
Systematic Withdrawal Plans (SWPs)
Systematic Withdrawal Plans (SWPs) in mutual funds can provide regular income while keeping your principal amount invested. This approach allows your investments to grow while generating monthly cash flow. It's a tax-efficient way to receive regular income, as only the gains are taxed.

Dividends from Equities
Dividends from equity investments can supplement your income. Companies with a consistent track record of paying dividends can provide a steady income stream. However, it's important to select companies with strong financial health to ensure reliability.

Pension Payouts
Reviewing your pension payout options is crucial. Ensure that the payouts align with your monthly expense needs. Opt for options that provide inflation-adjusted payouts to maintain your purchasing power over time.

Monitoring and Adjusting the Portfolio
Regular Review
Regularly reviewing your portfolio ensures that it remains aligned with your goals. Market conditions and personal circumstances can change, necessitating adjustments. A Certified Financial Planner (CFP) can assist in monitoring and rebalancing your portfolio.

Risk Management
Managing risk is essential, especially at your age. While equities can offer growth, it's important to limit exposure to avoid significant losses. A balanced approach with a mix of safe and growth-oriented investments is ideal.

Emergency Fund
Maintaining an emergency fund is crucial. This fund should cover 6-12 months of expenses, providing a cushion for unexpected events. It should be kept in easily accessible and low-risk instruments like savings accounts or liquid funds.

Seeking Professional Guidance
A Certified Financial Planner (CFP) can offer invaluable guidance in creating and managing your corpus. They can provide personalized advice, considering your unique financial situation and goals. Their expertise can help in selecting the right investment avenues and ensuring optimal asset allocation.


It's commendable that you are proactive about your financial planning. Ensuring a comfortable and financially secure retirement is crucial, and your careful consideration of different investment avenues reflects prudence.


Planning for a secure future can be daunting, especially with the uncertainty of market conditions. Your concern for maintaining a stable lifestyle for the next 20 years is valid. It's important to approach this phase with a well-thought-out strategy, balancing safety and growth.

Final Insights
Creating a safe corpus for your retirement requires a balanced approach. Diversification across different asset classes, regular reviews, and professional guidance are key. While fixed deposits and pension funds offer safety, mutual funds and equities can provide growth.

It's crucial to account for inflation and unforeseen expenses. Regular income can be generated through systematic withdrawal plans, dividends, and pension payouts. Regularly monitoring and adjusting your portfolio ensures that it remains aligned with your goals.

Your proactive approach and prudence in financial planning are commendable. By leveraging the expertise of a Certified Financial Planner (CFP), you can create a robust and sustainable corpus, ensuring a comfortable and worry-free retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in