I am 45-year-old. I am investing Rs 45,000 per month in these equity mutual funds -- HDFC Top 100 Fund, Franklin Prima Plus Fund, PPFAS Long Term Equity Fund and Kotak Flexi Cap Fund. Is my selection of funds good to create a corpus of Rs 3 to 4 crore for my retirement? I have already accumulated close to Rs 60 lakh for my retirement goal. Is Rs 3-4 crore sufficient to retire comfortably? My current monthly expenditure is close to Rs 50,000. Will I be able to achieve my goal comfortably in 10-15 years?
Raghvendra Nath, MD, Ladderup Wealth Management
A person can retire comfortably when their investment portfolio generates sufficient returns to take care of their day-to-day expenses. On your fund choices, I would request you to make two amendments. As a rule of thumb, your retirement portfolio should be at least 50 times your yearly expenses. With your current expenses, you will need a retirement portfolio of around Rs 3 crore. Given your current retirement corpus and SIP amount, at 12 per cent return, you will have a retirement corpus of around Rs 5.5 crore, which will be more than sufficient to take care of your daily expenses. You should be able to retire comfortably in the next 10-15 years.
Stay disciplined in your investments. You would not need all the retirement money in one go but you will need to freeze the returns generated in equities as you near your retirement. Seek help from a financial planner to understand how to lock-in the returns and redeem your money in parts as per your requirement.
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