Hello, I have a monthly saving of approximately rs 6000 in nps, rs7000 in pf with the rate of interest of approx 6.9, rs 23000 in SBI small cap mf, rs 16000 in ICICI prudential Blue chip mf, rs 5000 in kotak gold fund mf and rs 3000 in HDFC index s&p BSE sensex mf. I am 31 years old and i would like to know how much should I increase the investment and/ if I need to reallocate my sip to ensure retirement at 50 years old with a monthly expenses of 1lc.
Ans: You're off to a good start with your investments! Given your age and the goal of retiring at 50 with a monthly expense of 1 lakh, you have approximately 19 years to achieve this goal. Here are some suggestions to align your investments with your retirement goal:
Increase SIPs: At 31, you have time on your side. You might want to consider increasing your SIP amounts annually, perhaps by 10-15% to account for inflation and salary increments.
Reallocation:
Equity Allocation: Given your long-term horizon and age, you can afford to have a higher allocation to equities. Consider reallocating more towards equity mutual funds.
Diversification: Ensure you're not overly concentrated in a single asset class. Diversify across large-cap, mid-cap, and small-cap funds to spread the risk.
NPS & PF: NPS and PF are good vehicles for retirement savings, but they are more conservative. You might want to consider taking some risk by increasing your equity exposure through mutual funds to potentially earn higher returns.
Review & Rebalance: Periodically review your portfolio to ensure it aligns with your goals and risk tolerance. Rebalance if necessary to maintain your desired asset allocation.
Emergency Fund: Ensure you have an emergency fund equivalent to 6-12 months of expenses in a liquid and safe instrument.
Consult a Financial Advisor: Given the complexity of retirement planning, it might be beneficial to consult a financial advisor who can provide personalized advice based on your financial situation, goals, and risk tolerance.
Remember, retirement planning is a marathon, not a sprint. Consistency, discipline, and periodic reviews are key to achieving your retirement goals.
