I am 44 years old with take home salary of Rs 100,000 per month. Which pension scheme will be best for me to invest? How much do I have to invest for pension of Rs 50,000 or Rs 30, 000 per month from 65 years onwards? Kindly guide me.
Ans: You can choose to invest in pension/monthly income plan of insurance companies. Alternatively, you can use other financial investments like mutual funds, bonds, etc. which may require some matching of cash flows and also managing the reinvestment risk (If interest rates fall when you look to renew your deposit).
We recommend using a combination of avenues to plan for your pension, based on your risk profile.
In general, to get a payout of 50,000 for 25 years to a lifetime, you will need to invest 50k/ month for 10 years and this will change based on the rate of return during the contribution phase and also at the payout phase. This will significantly increase if you plan for inflation post retirement.