I am 43 year old, Govt job employee. I have in my PF 70 L, NPS monthly investment 6K from 2023, SSY 1.5 L yearly from 2018, MF investment SIP PPFCF DG -3K monthly with step up after every six months 2K, HDFC Hybrid Equity Fund DPG- SIP-2K, Bandhan MAAF DG SIP- 3K, SGB -1.5L, have Plot 1800sqf in hometown. I want to retire next 8 to 10 years. I want monthly income 1.5 L. Suggest pls
Ans: Assessment of Your Current Financial Position
You have a solid foundation with a mix of investments. Your PF, NPS, SSY, mutual funds, and SGBs are all diversified, which is good. However, achieving a monthly income of Rs 1.5 lakh post-retirement in 8 to 10 years requires a strategic plan.
Evaluating Your Existing Investments
Provident Fund (PF):
Rs 70 lakh is a significant corpus.
It will provide stability in your retirement portfolio.
National Pension Scheme (NPS):
Your Rs 6,000 monthly contribution since 2023 is a good start.
NPS provides tax benefits and a steady retirement income.
Sukanya Samriddhi Yojana (SSY):
Investing Rs 1.5 lakh yearly since 2018 ensures good returns for your daughter’s future.
SSY is a safe, government-backed scheme.
Mutual Funds:
SIPs in PPFCF DG, HDFC Hybrid Equity Fund, and Bandhan MAAF DG are smart choices.
Step-up strategy in PPFCF DG every six months increases your investment gradually, which is commendable.
Sovereign Gold Bonds (SGBs):
SGBs add a hedge against inflation in your portfolio.
The Rs 1.5 lakh investment in SGBs is wise for long-term growth.
Plot in Hometown:
The 1800 sq ft plot adds value to your overall asset base.
It’s a tangible asset that can appreciate over time.
Steps to Achieve Rs 1.5 Lakh Monthly Income Post-Retirement
1. Increase Mutual Fund SIPs:
Gradually increase your SIPs to accumulate a larger corpus.
Focus on diversified and equity-oriented mutual funds for long-term growth.
Avoid index funds due to their passive nature; actively managed funds tend to outperform in the long run.
2. Boost NPS Contributions:
Increase your NPS contribution if possible.
NPS has the potential for high returns due to its exposure to equity, which can help build a significant corpus.
3. Consider Regular Mutual Funds:
Investing through a Mutual Fund Distributor (MFD) with a CFP credential provides better guidance.
Regular funds come with professional advice, which can optimize your returns.
4. Enhance Retirement Corpus:
You can explore additional investment options like debt mutual funds or balanced advantage funds.
These funds offer a balance between risk and reward, helping you build a substantial corpus without high risk.
5. Utilize SGBs Wisely:
Continue holding SGBs for long-term capital appreciation.
The interest from SGBs can be a steady source of income during retirement.
6. Strategy for Your Plot:
You can consider selling or leasing the plot in the future to add to your retirement corpus.
Alternatively, if it appreciates significantly, it can serve as a backup financial resource.
Post-Retirement Strategy
1. Systematic Withdrawal Plan (SWP):
Post-retirement, convert your mutual fund corpus into a Systematic Withdrawal Plan (SWP).
SWP will provide you with a regular monthly income, aligning with your Rs 1.5 lakh requirement.
2. Annuities from NPS:
Upon retirement, utilize the NPS corpus to purchase annuities.
This will provide a fixed monthly pension, supplementing your income.
3. PF as a Safety Net:
Your PF can act as a reserve fund.
Use it for any large, unplanned expenses during retirement.
Finally
You’re on the right track with a diversified portfolio. With disciplined investing, increasing your SIPs, and strategically planning your retirement corpus, you can comfortably achieve your goal of Rs 1.5 lakh monthly income post-retirement.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
